Chinese electric vehicle (EV) battery giant, Contemporary Amperex Technology Co (CATL), will start to supply lithium-ion batteries to the American EV maker Tesla from January 2022 to December 2025, according to a notice released by CATL on Monday, Globaltimes.cn reports.
CATL announced that in order to further extend and deepen the friendly and cooperative relationship with Tesla, the Chinese battery maker and its American partner signed a “Production Pricing Agreement” on Friday.
The final sales shall be subject to the actual settlement of the purchase order issued by Tesla, according to CATL.
The new deal should be a continuation of the agreement signed between the two companies in February 2020, under which CATL agreed to supply lithium-ion batteries to Tesla, from July 2020 to June 2022.
“The signing of the agreement represents Tesla’s further recognition of the product quality and production capacity of the company’s batteries, which is conducive to strengthening the long-term and stable cooperative relationship between the company and Tesla, and in line with the interests of the company and its shareholders,” read the notice from CATL.
The battery maker also said that the agreement is expected to have a positive impact on the business performance.
Thanks to the rapid growth of the EV market in China, shares of manufacturers of batteries and new-energy vehicles continue to rise, with CATL stocks reaching 500 yuan ($77.4) on Monday, hitting a new high for the past year. Shares of CATL closed 3.71 percent higher at 493.9 yuan on Monday, increasing the company’s total market value to 1.15 trillion yuan.
Since the end of March, the stock price of CATL has increased significantly. Data show that between March 25 and June 28, the price of CATL’s stocks increased by 71.02 percent, well above the 13 percent rise on the market during the same period. Last year, shares of CATL skyrocketed by more than 150 percent on the A-share market.
China is the largest manufacturer for EV batteries in the world with CATL leading the global supply of lithium-ion batteries. The company has supplied EV manufacturers like Tesla, BMW, Volkswagen and Geely.
As a result of the fast development of the EV industry, China has gradually released regulations and policies to direct the industry’s healthy development.
China will support the innovation and development of electric batteries and promote the research of standards for a universal electric battery changing platform, battery core and accessories, according to a work plan on the car industry released by the Chinese Ministry of Industry and Information Technology on Monday.
It will also support the green development of EVs, including the development of standards for a battery recycling service network.