Tesla has reportedly tapped BYD’s battery manufacturing unit, FinDreams, as a new cell supplier for its upcoming Megafactory in Shanghai.
According to a report by LatePost, the partnership between Tesla and BYD is set to begin in the first quarter of 2025, and will see FinDreams supplying more than 20 percent of the cells needed for Tesla’s Shanghai Megafactory, a project which broke ground just last month.
The decision to partner with FinDreams as a cell supplier is a strategic move for Tesla in China. Until now, CATL (Contemporary Amperex Technology Co. Limited) was Tesla’s sole supplier of energy storage cells, following a transition from LG Chem when Tesla switched to the more cost-effective lithium iron phosphate (LFP) batteries.
According to the report, BYD offered Tesla highly competitive pricing, which played a crucial role in securing the deal.
The partnership with FinDreams will not only enhance Tesla’s supply chain but also support the significant production capacity of the Shanghai Megafactory, as FinDreams will contribute over 8 GWh annually, representing an order value of approximately RMB 3.5 billion (USD 480 million) per year.
The Shanghai Megafactory, specifically designed for producing Megapacks, broke ground on May 23, 2024, and is expected to have an annual production capacity of 40 GWh. This capacity will translate into approximately 10,000 Megapacks per year.
Tesla’s energy storage business, which includes the Megapack for large, industrial scale applications, and the Powerwall for residential use, has seen substantial growth. The Megapack accounts for approximately 80 percent of the revenue in Tesla’s energy storage segment.
