Tesla, Nio Supplier CATL Said To Be Planning A New EV Battery Plant In Shanghai

CATL, a battery supplier to Tesla Inc TSLA and Nio Inc NIO, is planning a major new automotive battery plant in Shanghai, Reuters reported on Thursday — citing sources. 

What Happened: The new battery plant would be able to produce 80 gigawatt-hours of battery cells a year, in addition to the 69.1GWh in current production capacity and another 77.5GWh under construction, the report noted.

Tesla has a manufacturing facility in Shanghai which it opened in 2019. The facility started delivering China-made Model 3 cars last year and China-made Model Y vehicles this year.

A final agreement between CATL and Shanghai is still pending, as per Reuters. 

See Also: Tesla Supplier CATL To Invest Up To $6B In Lithium-Ion Battery Projects

Why It Matters: CATL’s new Shanghai facility will help it draw a larger and more diversified talent pool than its headquarters in Ningde in southeastern China, the report noted.

The ramp-up plan is also likely to add to competitive pressure on Panasonic Corp PCRFY and LG Chem's LG Energy Solution unit, which are Tesla’s other battery suppliers.

The Elon Musk-led EV maker Tesla is also in advanced talks with China’s EVE Energy Co to add the battery maker to its supply chain at the Shanghai gigafactory, as per a previous Reuters report. 

Price Action: Tesla shares closed 3.01% lower at $605.12 on Wednesday.

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