The site is expected to make it easier to supply power cells to .

Chinese power battery giant Contemporary Amperex Technology Co Ltd ()'s battery module production base in Shanghai's Lingang will go into production in 2022, local media reported today.

The production base will contribute to the development of Shanghai's high-end equipment manufacturing industry, the report said, citing sources from the Shanghai Municipal Commission of Economy and Information Technology.

The manufacturing base in Shanghai is located in the Lingang area of Pudong, adjacent to Tesla's Giga Shanghai, the report noted.

On August 18, CATL (SHE: 300750) and the Shanghai government signed a strategic cooperation framework agreement to build a manufacturing base in Shanghai, which is expected to make it more convenient for Tesla's battery supply.

As a supplier to Tesla and , CATL will build a project in Shanghai that includes a global innovation center, an international functional headquarters, a future energy research institute and a high-end manufacturing base, according to a previous CATL announcement.

The two sides will deepen cooperation in the areas of cutting-edge new energy technology research and innovative applications, urban transportation electrification transformation, and new energy high-end talent cultivation, the announcement said.

The agreement was signed at the time with CATL by the Lingang Group, which manages the Lingang area that is home to the plant of Tesla, the world's largest electric vehicle manufacturer.

In February 2020, CATL signed an agreement with Tesla to supply lithium-ion power battery products between July 2020 and June 2022.

To further extend and deepen the friendly relationship between the two companies, CATL and Tesla signed a new agreement on June 25, 2021, building on the above agreement, the company said in an announcement at the end of June.

CATL's settlement in Shanghai will also logistically benefit Tesla's battery supply chain.

CATL is China's largest power battery manufacturer, with 11.45 GWh installed in China in November and a 55 percent market share, according to the China Automotive Battery Innovation Alliance.

(Graphic by CnEVPost)