Tesla chooses CATL for battery supply of its Gigafactory 3

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Tesla and CATL have signed a two-year contract to secure the battery supply of the Gigafactory 3, CATL becomes the second supplier after LG Chem.

With an ambitious target of 500,000 vehicles produced by 2020, Tesla must not fall into the hell of production, the favorite expression of its CEOElon Musk. In these conditions, it’s higher to insure its rear, particularly once it involves cells and batteries, the nerve of war for electrical vehicles.. As a result, Tesla and Panasonic may be historically linked, but this does not prevent the North American firm from diversifying its sources of supply.

The latest production plant, the Gigafactory 3, located near Shanghai, was inaugurated at the end of 2019 with the first Tesla Model 3 made in China. It is planned to produce some 150,000 Model 3s, as well as the future Model Y SUV.

To avoid the importation of batteries from Fremont and possible tariffs related to the trade war between the United States and China, Tesla is playing it safe with local supply. After a first partnership signed last August with South Korea’s LG Chem, it is the turn of China’s CATL to do business with Elon Musk’s company.

Strengthening supplyWith this agreement, Tesla seeks to ensure that its battery supplies will never be slowed down, even in the event of peak production, which should be the case in the coming years. However, this will not be the business of some European car manufacturers in the grip of supply difficulties. The solution? Sign exclusive agreements with industry leaders or create joint ventures.

For example, CATL, which collaborates with BMW, Daimler, Bosch, psa Group, Volkswagen, Renault and Volvo, has launched the construction of a plant in Germany, which is scheduled to start in 2022 with a production of 14 GWh and a final target of 24 GWh. It should be noted that BMW indirectly contributed to the construction of the plant through a contract of one billion euros for the supply of cells and batteries.

As for Volkswagen, it is not one, but four suppliers (LG Chem, Samsung SDI, CATL and SK Innovation) of cells that supply the Braunschweig plant in Germany for the production of rechargeable batteries that will be used to equip plug-in electric and hybrid vehicles.

On the other hand, Volkswagen has created EBU, a consortium for the production of battery cells, one of whose partners is the Swedish Northvolt, considered the only European gigafactory. This start-up was founded in 2016 by Peter Carlsson, a former executive of… Tesla.

On the European side, the “Airbus of batteries” took off with the recent launch of a pilot plant in New Aquitaine under the leadership of Total-PSA. It will be followed by two others: one in France and the last in Germany.

According to information provided by CATL, it is Tesla that will determine “the volume of battery purchases between July 2020 and June 2022, according to its own needs”. There are no specific capacity restrictions in that contract. Tesla, however, says that the battery volume attributed to LG Chem and CATL will be much lower than that from Panasonic.

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