Tesla Reportedly Signs Battery Supply Agreement With EVE

According to foreign media reports, there are rumors that US EV manufacturer Tesla has signed a battery supply agreement with Chinese lithium battery manufacturer EVE Energy. Under the agreement, EVE Energy's new factory under construction in Malaysia will supply ESS batteries to Tesla.

It is reported that EVE Energy's new factory in Malaysia is expected to begin production in Q1 2025, at which time it may employ 2,000 workers. The factory will supply batteries to customers in Southeast Asia, Europe, and North America, and may start supplying ESS batteries to Tesla's US operations in 2026.

Following the release of the above report, EVE Energy's stock price rose by 6.6%.

Earlier reports indicated that EVE Energy Malaysia had secured a long-term supply commitment from a US customer. While there is speculation that this US customer is Tesla, EVE Energy has not disclosed the name of the customer or any details about the long-term supply commitment, only responding that "this transaction will enhance EVE Energy's influence in the global ESS market."

Earlier this year, it was reported that Tesla was hiring industrialization engineers for battery suppliers in Malaysia. If Tesla has signed a battery supply contract with EVE Energy, the necessity of this job position becomes self-evident, and EVE Energy would become Tesla's sixth battery supplier. Tesla has previously signed battery supply agreements with Panasonic, LG Energy Solution, CATL, BYD, and Sunwoda. EVE Energy would also become the third company, after CATL and BYD, to supply ESS batteries to Tesla's US operations.

Prior to this year, CATL was the sole battery supplier for Tesla's US ESS factory. However, Tesla has been increasing its options for battery suppliers to gain pricing power over batteries. According to informed sources, even after Tesla expanded its pool of battery suppliers, CATL remains the largest supplier for Tesla's ESS business.

It is reported that Tesla purchases batteries from its suppliers and assembles them into complete ESS solutions, including large-scale ESS products like Megapack for office buildings and factories, as well as Powerwall for residential use. Megapack contributes approximately 80% of Tesla's ESS revenue. Currently, the battery demand for Tesla's US ESS factory is about 40 gigawatt hours annually and continues to grow.

Earlier this year, Tesla purchased an LFP battery production line from CATL and established an LFP ESS battery factory in Nevada, US, beginning in-house production of batteries for ESS.

Additionally, Tesla's Shanghai ESS Gigafactory is expected to be completed by the end of this year and will specialize in producing Megapack. The factory is also expected to begin production in Q1 2025, with an initial annual output of 10,000 Megapacks, equivalent to approximately 40 gigawatt hours of storage capacity. Tesla stated that it will sell Megapack in China and other markets. Notably, the Shanghai ESS Gigafactory is Tesla's first ESS Gigafactory outside the US and its second factory in Shanghai.