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According to overseas media reports, people familiar with the matter said that Tesla has reached a preliminary agreement with Ningde Times to promote China Ningde Times Company as a battery supplier to the Shanghai factory as early as next year. The two companies are negotiating to expand global cooperation.

After months of negotiations, Tesla CEO Elon Musk (Elon Musk) traveled to Shanghai in August to meet with Ningde Times executives for about 40 minutes before the two companies reached a non-binding agreement, according to people familiar with the matter. The supply agreement will be signed by mid-2020 at the earliest, but the partnership may not be guaranteed, as the two companies still need to determine details, such as how many batteries Tesla will buy.

It can be said that the investment and construction of Tesla's Shanghai factory exceeded expectations and tenders were frequently invited. In January this year, Tesla announced the official opening of the Shanghai factory, which has been built in less than ten months and is now in trial production.

Denholm, chairman of Tesla, said yesterday that he was working with the local government to obtain a manufacturing license, which is expected to be obtained by the end of 2019. Denholm, chairman of Tesla, said on Tuesday that the Shanghai plant had been completed and that it had started to produce cars.

And this series of rapid construction, not only because Tesla is optimistic about the future domestic market, but also because in the absence of domestic production, its models have become an important growth point for Tesla's profits.

According to Tesla's third-quarter data, Tesla's sales in the US market in the third quarter of this year were 3.127 billion yuan, down 39% from the same period last year; with the exception of the US market, sales increased in several other markets. Among them, Tesla had the largest growth in the Chinese market, with sales of US $669 million in the third quarter, up 60.40% over the same period last year, and US $2.183 billion in the first three quarters, up 51.07% from the same period last year. At present, China has become the second largest sales area of Tesla.

And Tesla Model 3 three models have also entered the list of state subsidies. According to a previous announcement issued by the Ministry of Industry and Information Technology, domestic models produced by Tesla's Shanghai factory will also be subsidized by the state's new energy vehicles. According to Tesla's official website, the maximum discount for some Model 3 models can reach 52000 yuan, and the starting price of the new car is 355800 yuan.

Compared with the top three new car-building forces in China, the benchmark price of ES6 is 358000 yuan, the price of Xiaopeng G3 is 143800 yuan, and the price of Weimar EX5 is 189800 yuan. From this point of view, only the price struggle between ES6 and Tesla Model 3. Obviously, the domestic Model 3 will be more competitive.

In order to seize the market, reduce costs and make profits, Tesla had to speed up the construction of the factory and at the same time seek the absolute advantage of localized supply chain.

Batteries make up the bulk of the cost of electric vehicles, accounting for nearly 40 per cent of the value, which means that long-term supply agreements will be worth billions of dollars. Ensuring an adequate supply of homegrown batteries is crucial to Mr Musk's expansion in the world's largest car market. China's supply will make Palo Alto, Calif.-based Tesla less dependent on imports.

At the same time, for the Ningde era, the final agreement will enhance its image as the world's emerging battery business. The company, located in the south of Fujian Province, is already a supplier to global electric car start-ups such as Xilai and established auto giants such as Volkswagen and Daimler.

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