Tesla in talks with potential Gigafactory 3 battery supplier for China’s Model 3: report



Tesla is reportedly looking into China-based Contemporary Amperex Technology Co Ltd (CATL) as a potential battery partner for Gigafactory 3, which is expected to start producing electric cars by the end of the year. CATL is among China’s most prominent battery suppliers, and it is on track to become the country ’s biggest manufacturer of lithium ion batteries.

Bloomberg notes that the update was provided by people knowledgeable about the discussions, who asked to remain anonymous due to the talks still being confidential. According to the publication’s resources, the two companies are discussing the possibility of a partnership for Gigafactory 3, but there is no guarantee yet that an agreement will be fulfilled.

Tesla has been showing signs that it is in the process of looking for battery suppliers for the upcoming facility, which is expected to make both the Model 3 and Model Y to the local Chinese market. The company did mention that a “fully qualified” seller in its most recent annual report, though Tesla also highlighted that it is working on incorporating more. This “qualified vendor” seems to be referenced by the recent report’s resources, who note that CATL is currently discussing the required specifications of the battery cells with Tesla.

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This isn’t the first time that rumors emerged about Tesla’s potential battery partner for Gigafactory 3. Last January, reports emerged pointing to Tesla allegedly signing a preliminary agreement with China’s Tianjin Lishen for the Shanghai-based factory’s batteries. The rumor was short lived, with Tesla saying that no preliminary arrangements have been reached. It remains to be seen if the electric car maker will react similarly to the recent CATL reports.

Having a formidable battery partner is a necessity for Tesla’s expansion plans in China. For the enterprise to saturate the country’s electric automobile market, it should be able to manufacture affordable, high-volume vehicles that leave no compromises in terms of quality. For this to occur, Tesla must be able to make premium battery packs at scale. This is something that the firm ’s Chinese battery partner have to keep in mind, as Panasonic, Tesla’s partner that supplies the cells to the Model S, 3, and X, admitted last year that some of the slowdowns at Gigafactory 1’s production could be blamed on its own inability to meet the electric car manufacturer ’s demand. “The bottleneck for Model 3 production continues to be our batteries,” Panasonic’s automotive business head Yoshio Ito said.

Tesla’s Gigafactory 3 is showing a notable amount of progress over the past months, with recent statements by a Shanghai official estimating that the centre will be completed by May. Just as initially scheduled, tooling of this factory is expected to commence immediately after, allowing Tesla to make its first locally-made Model 3 by the end of 2019.

The post Tesla in talks with potential Gigafactory 3 battery supplier for China’s Model 3: report appeared initially on TESLARATI.com.

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