Tesla Inc (NASDAQ:TSLA) has entered a pact to purchase batteries from the Chinese top battery manufacturer – CATL. However, the purchase volumes will vary between July 2020 and June 2022. Tesla already has a battery supply accord with Panasonic Corp.
Tesla will acquire batteries from LG Chem
Last week during an earnings call, Tesla said it would buy batteries from CATL and LG Chem on a small scale. The company builds Model 3 cars from a factory based in Shanghai. It has built the factory, which has become operational last year, with an investment of $2 billion. The company will diversify the battery supplies for this plant.
Strong demand for Tesla’s Cybertruck
Within one week of introducing Cybertruck, Tesla sees a huge demand for the first electric vehicle. The company has garnered 200,000 reservations within three days of unveiling the electric truck. Tesla is upbeat about the prospects of Cybertruck.
Chief Executive Officer of Tesla, Elon Musk, said he has not seen such a huge demand just like Cybertruck has received now. The company will put in significant efforts to manufacture and sell several cybertrucks to satisfy the demand. Tesla expects to sell the cybertrucks in late 2021.
Meets capital requirements from internal accruals
Tesla has grown to such a level that it can meet the fund needs from its internal accruals. Elon Musk allays speculation that the company will raise funds from the market for expansion. He said the company is capable of meeting funds needs internally.
Delivery of Model Y would begin in March 2020
In an update to the investors in Q4, Tesla said the production of Model Y Vehicle is already begun. The company would commence the delivery of the Model Y vehicle in March 2020, albeit on a small scale. It will ramp up the deliveries in the upcoming quarters. Chief Finance Officer of Tesla, Zachary Kirkhorn, said the company expects higher margins on Model Y vehicle when compared to Model 3.
Expects one and a half week delay
Zachary said the company expects a one and a half week delay in the ramp-up of production of Model 3 vehicle at its factory based in Shanghai because of the coronavirus.