Chinese Electric Vehicle Battery Manufacturer CATL announced on Monday that it had signed a new long-term agreement with U.S. EV maker Tesla to supply battery cells to the company. Shares of CATL have been climbing in recent months in anticipation of the deal.
CATL will start to supply lithium-ion batteries to Tesla from January 2022 to December 2025, the notice showed. The new deal is 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.
According to the announcement, the final sales shall be subject to the actual settlement of the purchase order issued by Tesla.
The Shenzhen-listed company (SZN: 300750) issued a statement about the deal, “The new agreement indicates Tesla’s further recognition of our product quality and production capacity, which will help strengthen the long-term and stable cooperative relationship between us.”
The new deal is expected to have a positive impact on CATL’s business performance.
As early as the institutional investigation period, CATL said that their cooperation with Tesla is long-term, but they didn’t need to supply all of the batteries Tesla needed. The supply scope wouldn’t be restricted to lithium iron phosphate or ternary batteries.
CATL’s share price has risen by 360.03% since January last year. On Tuesday, its opening price was 513.65 yuan, with its total market value reaching 1.11 trillion yuan.
As of 10:00 am on Tuesday, the real-time Forbes Billionaires List has shown that Zeng Yuqun, chairman of CATL, is currently worth an estimated $28.4 billion, ranking 52nd in the world. Zeng’s wealth is mainly derived from his 24.53% ownership of CATL shares, making him the largest shareholder in the company.
According to the forecast of CPCA, the sales volume of new energy vehicles in China will reach 2 million units this year. As a leading EV battery supplier, CATL has provided batteries for BMW, Volkswagen and Geely.
According to another announcement on Monday, CATL signed an agreement with CICC Capital, Qingdao Green Development Fund Management Co., Ltd. and other partners on June 25th, aiming to invest in new energy fields such as energy conservation and emission reduction, environmental protection and governance, clean energy, circular economy and green manufacturing.