BYD's battery making unit FinDreams will be Tesla's new supplier of energy storage cells outside of CATL, securing more than 20 percent of orders for the Megapack product line, according to local media.
Outside of CATL, BYD's (HKG: 1211, OTCMKTS: BYDDY) battery manufacturing unit FinDreams has become a new cell supplier to Tesla's (NASDAQ: TSLA) energy storage business in China, according to a new report.
FinDreams struck a deal with Tesla in March to supply the latter's energy storage product manufacturing plant in Shanghai, LatePost reported today.
FinDreams will begin supplying Tesla with cells for energy storage in the first quarter of next year, the report added.
Tesla's energy storage facility production plant in Shanghai, called the Megafactory, broke ground on May 23 and is the company's first energy storage project outside its US home market.
The factory is located in the Lingang area of Pudong, Shanghai, which is also home to Tesla's electric vehicle (EV) factory in China that produces the Model 3 and Model Y.
Tesla's energy storage business model involves sourcing cells from suppliers and assembling them into complete energy storage systems, including the Megapack, a large-scale energy storage system for office buildings and factories, and the Powerwall for homes.
Megapack contributes about 80 percent of the revenue to Tesla's energy storage business, the LatePost story noted.
Only the Megapack product line is currently planned for Tesla's Shanghai energy storage plant, and the primary supplier of the cells used in the plant has been identified as CATL, with FinDreams as an alternative supplier, according to LatePost.
FinDreams' share of supply should exceed 20 percent, the report said, citing a person familiar with the matter.
Tesla's Shanghai energy storage plant is designed to have an annual capacity of 40 GWh, which would mean an annual supply of up to 8 GWh from FinDreams and an annual order value of up to RMB 3.5 billion ($480 million), the report said.
Tesla switched its energy storage system cells from high-cost lithium ternary batteries to low-cost lithium iron phosphate (LFP) batteries in 2021, and gradually switched its supplier of energy storage cells from LG Energy Solution to CATL.
Throughout 2023, CATL was Tesla's sole supplier of energy storage cells. Possibly out of a desire to balance costs and hold more bargaining power, Tesla has decided to bring in FinDreams as a new supplier, according to LatePost.
“BYD gave Tesla the best price, which is close to the cost line,” the report quoted a source close to BYD as saying.
Tesla's Shanghai Megafactory is expected to go into production in the first quarter of 2025, with the Megapack producing up to 10,000 units per year and nearly 40 GWh of energy storage, according to a statement last month.
Shanghai Lingang Economic Development Group (Lingang Group) became the first customer in China for the factory's product, Megapack, and signed with Tesla about the first orders at the groundbreaking ceremony.
Lingang Group ordered eight sets of Megapacks from Tesla in the deal, according to the LatePost report today.
The energy storage business is BYD's fastest-growing business at the moment, with FinDreams sales of 28.4 GWh in 2023, up more than 136 percent year-on-year, the report noted.
CATL and FinDreams are the top two players in the global energy storage battery cell market, with shares of over 35 percent and 13 percent respectively in 2023, the report said, citing data from InfoLink.
($1 = RMB 7.2456)
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