As Contemporary Amperex Technology (CATL), China's largest automotive lithium-ion battery maker, is about to supply Tesla with batteries, the price of Model 3 made in China is expected to fall further.

CATL issued an announcement on Monday saying that it intends to sign an agreement with Tesla to supply lithium-ion power battery products to Tesla, and the purchase volume of products must be subject to Tesla's subsequent specific purchase orders.

At the end of last month, Tesla released Q4 and full-year financial reports for 2019. At the financial report meeting at the time, Tesla also confirmed a message that they had reached a cooperation with CATL.

Tesla's cooperation with CATL has been rumored for a long time. It has been reported that in late August 2019, Tesla CEO Elon Musk went to Shanghai to meet with CATL executives for about 40 minutes.

Subsequently, the two companies reached a non-binding agreement, and the final battery supply agreement is expected to be signed in mid-2020, and batteries purchased from CATL will be used for Model 3 models.

Previously, Tesla had denied this rumor. At the end of last year, the media confirmed that the relevant person in charge of Tesla China had verified.

However, the two sides have not officially announced the details of the cooperation, but Tesla's cooperation with CATL will obviously start with the Model 3 electric car made in China.

At present, the Model 3 used in China is still powered by Panasonic and LG, using the latest 21700 battery. Its energy density is about 300Wh/Kg, which is about 20% higher than the 205Wh / kg of the original Panasonic 18650 battery. This battery is also the battery with the highest capacity density in mass-produced passenger cars.

According to public data, CATL will achieve 32 GWh of installed power in 2019, a year-on-year increase of 37%; supporting 120 domestic car companies, including 9 customers supporting more than 1GWh, and a market share of 51.76%.

As one of the most important costs of electric vehicles, after using Chinese-made batteries, there will be room for further exploration of the price of Model 3 made in China.

The price of the upgraded version of the standard rang Model 3 has been cut from 355,800 yuan to 295,000 yuan.