Tesla Supplier CATL Said To Be Building Manufacturing Base In Shanghai — Home To EV Maker's China Gigafactory
China’s CATL, a battery supplier to Tesla Inc (NASDAQ: TSLA) and Nio Inc (NYSE: NIO), has signed an agreement with the local government to build a manufacturing base in Shanghai, cnEVpost reported on Thursday.
What Happened: The manufacturing base will double up as a global innovation center, an international functional headquarters, and a future energy research institute.
CATL's settlement in Shanghai is expected to logistically benefit Tesla's battery supply chain. The Elon Musk-led electric carmaker manages to keep prices of Chinese-made electric vehicles relatively lower helped by increased localization, cnEVpost noted.
See Also: Tesla, Nio Supplier CATL Seeks To Raise B In Bid To Expand Lithium-Ion Battery Production
Why It Matters: CATL is planning to raise up to $9 billion in a private share placement to fund six projects aimed at lifting the production capacity of lithium-ion batteries. The move comes at a time when CATL is expanding battery manufacturing capacity across China and in Germany.
Battery suppliers are adding capacities as automakers across the globe make a dash to either switch to electric vehicles or expand the existing electric lineup.
Price Action: Tesla shares closed 3.5% higher at $688.99 on Wednesday.
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