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Tesla To Start Receiving CATL Batteries From New Factory in Shanghai

CATL has already started supplying batteries to Tesla Giga-Shanghai. The new CATL factory began work last November and as of today, it is already running at a 60% production capacity. The supply deal is until December 2025, naturally opened to subsequent renewals.

CATL is one of the companies with the greatest projection and expansion capabilities worldwide on the battery market for electric cars, and is also currently positioned as the largest manufacturer worldwide. A few months ago we learned of a new opening project for a new lithium-ion battery construction factory in Shanghai, and now a report has arrived that states that it has already started its production and supply to relevant brands such as Tesla.

It was in June 2021 when CATL announced the start of the project for this new battery plant, which is not a new construction but has been adapted over already existing facilities. It was conveniently located near Tesla's new factory in Shanghai, with which it signed a supply agreement just days after the announcement of the start of construction and renovation works. This aforementioned agreement would apparently run from January 2022 to December 2025, so CATL has already given green light to the start of the actual supply process and to carry out with the very important contract-agreement.

Giga Shanghai, courtesy of Tesla Inc.

The initial plan is for this factory to carry out the construction of a total of 80 GWh annual plant capacity, which could be equivalent to providing batteries to more than 1,000,000 electric cars a year. According to reports from the media CnEVPost, production in this factory has already started and presumably has already reached an average level of 60% of annual production capacity.

On the other hand the local media Shanghai Observer also reports this event, adding that this aforementioned production would have already begun to be sent to Tesla as early as last November. The new CATL factory is located just 3 kilometers from the location of Tesla's Giga Shanghai, which is a strategic location for the benefit of both corporations. The renovations on the original installation only required minor modifications and some new manufacturing lines, by which the benefit for CATL will be very positive as this endeavor clearly had a not so high investment cost.

Megapack, courtesy of Tesla Inc.

The factory, according to the different reports, will cover an annual production capacity of 80 GWh, out of which at least 45 GWh will go to Tesla. This fact automatically makes Elon Musk´s company a main customer of this plant, even though it will not be the only one since its capacity is notably greater than what was initially stipulated for Tesla.

This new manufacturing plant includes, in addition to the battery construction base itself, housing and facilities for a global innovation center, an international headquarters office building and an "energy research institute of the future". As it can be seen, the facilities will be remarkably well equipped all along the different segments of the business of selling and manufacturing batteries for electric cars.

Tesla Giga Shanghai's production line currently produces its Model Y and and others powered mainly by batteries with NCM technology from LG Energy Solution, although little by little they will be evolving until they fully adopt the CATL LFP (Lithium Iron Phosphate) system. In the coming months we will know what the status of this agreement is, although it is already predicted to be highly attractive and positive for both corporations.

Tesla Model Y, courtesy of Tesla Inc.

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All images courtesy of Tesla Inc.

Nico Caballero is the VP of Finance of Cogency Power, specializing in solar energy. He also holds a Diploma in Electric Cars from Delft University of Technology in the Netherlands, and enjoys doing research about Tesla and EV batteries. He can be reached at @NicoTorqueNews on Twitter. Nico covers Tesla and electric vehicle latest happenings at Torque News.