Tesla to buy electric auto batteries from China's CATL

Marco Green
February 5, 2020

The market surge, which has seen Tesla's share price more than quadruple from its lows in May a year ago, means Tesla is more than just an "existential threat" to legacy auto makers: it is now the second most valuable vehicle company in the world, behind only Japanese automaker Toyota.

Shortly after the first Tesla Model 3s built at the company's factory in Shanghai reached the hands of customers, Musk confirmed the site will also build the Tesla Model Y which the brand expects to outsell the Model 3, Model S, and Model Y combined. He sees "clear momentum around global EV demand inflection heading into 2020 and beyond, with Tesla leading the charge".

Electric vehicle battery producer Contemporary Amperex Technology Co Ltd (CATL) said that it has signed a battery supply agreement with Tesla earlier this week, Reuters reports.

"We are catching up as Tesla is quickly expanding production", Panasonic Chief Financial Officer Hirokazu Umeda told an earnings briefing, referring to battery cell production. Tesla secured a similar battery supply deal with LG Chem in August 2019.

Despite past production delays, parts shortages, labor cost overruns, and other difficulties, we expect Tesla to benefit from its dominant position in the electric vehicle industry and to improve performance in 2020 and beyond. Selesky reiterated a buy rating.

One of the investment companies, Ark Invest, recently released an incredible forecast/expectation that Tesla stock will hit $7,000 by 2024. According to ARK's latest note, published on January 31, its 2024 expected value per share for Tesla is $7,000. Baillie Gifford now holds a 7.67% stake in the company, up from 7.46% previously.

Two consecutive profitable quarters for Tesla (with record vehicle sales) and profitable battery production for Tesla by Panasonic, surely are strong reasons for the stock to make gains. Tesla's market cup now stands at just over $140 billion.

Other reports by Click Lancashire

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