Tesla China Agreement

Tesla will determine the volume of the battery purchase between July 2020 and June 2022, based on its own needs, CATL said in a stock exchange, adding that the agreement does not impose restrictions on Tesla`s purchase volume. Aside from IP concerns, foreign companies traditionally believe that partnerships with Chinese companies are necessary to ensure favourable supply chain agreements with local producers and to guide local strategies. The opening of a Chinese factory was the key to avoiding a further escalation of tariffs imposed by the United States and China. The end of political negotiations is not yet in sight, although the White House said in December that it had reached a "phase one" agreement with Beijing on "substantial purchases" of U.S. industrial products, including agricultural, energy and manufacturing products. A signing ceremony is scheduled for January 15, the President tweeted. Tesla has signed a "cooperation agreement" with the Shanghai Municipal Government to build its third gigafactory and the first in China, as the company announced today. Tesla says it wants to be able to make 500,000 cars a year in the world`s largest electric vehicle market, although the company says it will take some time before the plant runs. Tesla, which has a long-standing battery delivery agreement with Japan`s Panasonic Corp. 6752.T, said in its profit appeal last week that its pact with LG Chem 051910.KS and CATL was on a smaller scale. Faced with the escalating trade war between the United States and China, which has led Tesla to raise prices for its Model S and Model X models by 20% in China, the electric car group will try to circumvent the rising tariffs. Tesla CEO Elon Musk has signed a preliminary agreement with the Shanghai government to build a Tesla plant in China.

The new facility is expected to produce 500,000 vehicles per year, doubling the production of electric vehicles in combination with the existing plant in Fremont, California. Much of the investment in Shanghai gigafactory will be financed by Chinese banks and financial institutions. This includes an agreement with Chinese lenders in March on a 12-month credit facility of up to $521 million for gigafactory. SHANGHAI (Reuters) – Chinese electric vehicle battery maker CATL 300750.SZ on Monday signed a battery delivery contract with Tesla TSLA. O signed. The term "competitive neutrality" is now a slogan in Beijing and productive agreements such as those with Tesla make the government very important responsible. It remains unclear whether the sudden easing of restrictions is directly due to the pressure of the trade war or a general slowdown in the Chinese economy. Tesla recently built a tent in one of the parking lots of its Fremont plant to house other production sites in order to reach the goal after several quarters. As Tesla tries to import factories into China and Europe, the productivity of Ford, a 115-year-old company famous for its early launch of the production line, will not be easily exceeded. Yet Ford`s quips are reminiscent of the mockery of the first iPhone by former Microsoft boss Steve Balmer.

Tesla, CCB, AgBank, ICBC and SPDB did not immediately respond to Reuters` requests for comments. Car production in China offers Tesla a way around these tariffs and could help the company mitigate the effects of a new escalation between the United States and China. It also gives the company more direct access to its second largest market in the world.

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