Contemporary Amperex Technology Company (CATL) has announced that the deal to supply lithium-ion batteries to Tesla has now been extended. As part of the deal, CATL will supply batteries to the American electric car maker till the end of 2025. Both the companies have signed a Production Pricing Agreement. CATL said that the deal would help deepen the friendly relationship with the electric carmaker. This is in continuation of the previous agreement signed by them in February last year. As per the previous agreement, CATL had agreed to supply batteries to Tesla from July 2020 through June 2022. CATL said that the signing of the agreement is testimony to the fact that we have been providing the best quality of batteries. “Tesla has signed the agreement and this is an extension of the deal signed earlier. The development is recognition of the quality of the product we have been giving to the carmaker. It also shows that Tesla has faith in our production capacity of batteries. All these things are conducive to a strong relationship between both companies. Also, the deal is in the interests of not only the company but also its shareholders,” CATL said in a statement.
CATL said that it strongly believes that the new deal with Tesla would have a positive impact on its business. The clearly indicates that Tesla has long-term plans for China. Tesla has been expanding production at its Gigafactory in Shanghai. The EV manufacturer hopes that it will manufacture it more affordable USD 25,000 electric vehicle from the factory. But access to low-cost and high-performance batteries is a core element in order to achieve this task. CATL has been a trusted partner of Tesla and the new deal clearly indicates this. As cheap and high performance batteries are critical to achieve future goals, Tesla might find a suitable partner in CATL. There were also reports that Zeng Yugun of Contemporary Amperex Technology Company was considered to be very close to Elon Musk. Yugun had once he and Tesla chief executive officer often talk about prospective innovations in technologies. “We will very often discuss how to bring more innovation in technologies. Elon also discusses the goals of making Tesla vehicles more affordable. He would talk about the cost for the entire day. I told him once that I would have solutions,” Zeng was quoted as saying in a media report. “We get along well and Elon Musk is a fun guy,” he added.
Experts also believe that working with Tesla is bringing more success to CATL and is boosting its domestic sales. It is well known that Tesla and CATL have a strong foundation and the partnership can be felt in the continued extension that has been announced. Meanwhile, Tesla has started a recall of over 285,000 cars in China. The company said that the recall has been initiated because of safety concerns of the cruise control system of the Model 3 and Model Y. According to the State Administration of China, the cruise control of these models of Tesla can be mistakenly switched on when the person driving the vehicle attempts to change gears or if the gear selector is brushed by accident. This can cause the vehicle to accelerate unexpectedly. The vehicles that are being recalled consist of 249,855 Model 3 and Model Y vehicles that were built at the Shanghai factory of Tesla. This also includes 35,665 Model 3s that were imported. Tesla has issued a statement in it apologized for the inconvenience that the recall may cause to concerned car owners.