LPast week, Reuters reported that Tesla added two EV lithium-ion cell battery suppliers to the equation: LG Chem and CATL. We already heard about LG Chem supplying the Tesla Gigafactory 3, so the big news is CATL here.
Elon Musk said at the recent Q4 2019 Earnings Call (see the full transcript here) that the two new partners will be supplying batteries at a small scale, compared to Panasonic. By the way, he admitted that the relation with Panasonic – the primary supplier/partner – “has been excellent.”
“Well, I guess, a lot of people sort of made fun of us for not like being able to build cars and build capacity. And it’s like now it turns out actually even the pros have trouble with it. It’s pretty hard. So — but the fact is, we’ve already demonstrated massive growth in cell production capacity at our Gigafactory in Nevada. And we have to go from the cells to the modules to the pack. So it’s not just cell capacity but also module and pack capacity. So we’ve just gotten pretty good at that. And we’ve worked well with key partners like Panasonic. The Panasonic relationship has been excellent. They’ve been a great partner with us for many years. We’ve added some additional partners that are small at scale with LG and CATL.
And we’ll have more to talk about this in detail in Battery Day, like I said probably April, we’ve got a very compelling strategy. I mean, we are super deep on cell — super deep, cell-through battery, so cell module battery.”
In the case of CATL, the scale is not only expected to be “small”, but the volume was not yet determined and Tesla did not yet place a binding order. The timeframe for the deal is July 2020 and June 2022.
“Tesla will determine the battery purchase volume between July 2020 and June 2022, according to its own needs, CATL said in a stock exchange filing, adding the agreement does not impose restrictions on Tesla’s purchase volume.”
Moreover, we don’t know whether Tesla is interested in cylindrical cells (as usual) or maybe prismatic cells (for the first time).