Benzinga | Jun 29, 2021 02:04AM EDT

Tesla Expands Battery Supply Agreement With CATL To 2025

Tesla Inc (NASDAQ:TSLA) has signed a new long-term battery cell agreement with China's Contemporary Amperex Technology Co to secure supplies between January 2022 and December 2025, as per an Electrek report.

What Happened: The earlier agreement between Tesla and CATL was between February 2020 until June 2022, as per the report.

After years of sticking to Panasonic Corp (OTC:PCRFY) as a key battery supplier, Tesla has in recent years taken a multi-supplier approach due to rising competition and the race to secure large amounts of batteries, as it prepares for more of its gigafactories going into production.

See Also: Tesla, Nio Supplier CATL Said To Be Planning A New EV Battery Plant In Shanghai

Why It Matters: The development comes close on the heels of Panasonic disclosing shedding its entire Tesla stake to fund new strategic investments even as it continues to maintain the "business partner" relationship with Tesla.

Panasonic and Tesla had last year signed a three-year pricing deal to manufacture and supply lithium-ion battery cells at the Gigafactory in Nevada.

CATL is also a battery supplier to Tesla rival Nio Inc. (NYSE:NIO).

Price Action: Tesla shares closed 2.51% higher at $688.72 on Monday.

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