U. S. electric vehicle (EV) maker Tesla Inc has held talks with China’s Tianjin Lishen to supply batteries for its new Shanghai factory, and two people with direct knowledge of the matter said the pair signed a preliminary agreement.
BEIJING (Reuters) – U. S. electric vehicle (EV) maker Tesla Inc (TSLA. O) has held talks with China’s Tianjin Lishen to supply batteries for its new Shanghai factory, and two people with direct knowledge of the matter said the pair signed a preliminary agreement.
The companies have yet to decide how large an order Tesla would place, and Lishen is still working out what battery cell size Tesla would require, one of the people said.
Details of the agreement were unclear. In Chinese, a preliminary agreement could refer to mere acknowledgment through to a statement of intent.
The talks come as Tesla looks to localize battery cell production in the face of mounting competition from a swathe of domestic EV makers in the world’s largest car market, where a Sino-U. S. trade war is increasing the cost of U. S. imports.
Tesla said it received quotes from Tianjin Lishen to supply batteries for the Shanghai plant but did not proceed further.
“We have not signed any agreement of any kind with them,” a Tesla spokeswoman told Reuters.
Lishen told Reuters that it had not signed any agreement with Tesla to supply batteries to the factory.
