The record high sales of EVs coupled with hotly contested lithium-ion battery industry have driven the fast expansion of battery manufacturers. In the first month of 2022, CATL, the world’s leading battery supplier, has already started production in its new battery plant based in Shanghai, only 3 kilometers from Tesla Giga Shanghai.
Nowadays battery suppliers are tied with complete vehicle makers. So it makes sense for CATL to build a plant near Tesla to ensure capacity and effective supply. The soaring demand pushes companies like CATL to increase capacity, while car makers can have a lock on battery supply. In February 2020, CATL made a contract with Tesla and offered lithium-ion battery to the latter. The renewed deal would last until December 2025.
On top of reducing transportation costs and facilitating communication with business partners, CATL based its new plant in Shanghai mainly to attract professionals in the new energy supply chain of the Yangtze River Delta, according to an investor in the lithium-ion battery industry. Shanghai, known as China’s economic hub, have implemented many measures favorable to high-level talents. Building a strong team made up by professionals can fuel the company’s long-term development, and Shanghai is the right place to gather such teams.
Clearly, CATL is increasing its presence in Shanghai. On August 8, 2021, CATL signed a strategic cooperation framework agreement with Shanghai municipal government, preparing to locate its Global Innovation Center, Future Energy Research Institute, and High-end Manufacturing Base in this modern metropolis. The Global Innovation Center will work on innovative systems such as “chemistry system innovation” and “business model innovation” to undertake international business functions; The institute will work with Shanghai Jiaotong University to build a frontier platform featuring “scientific research and innovation” and “talent cultivation”; The High-end Manufacturing Base, driven by the latest manufacturing technology, will build a green and smart plant.