Starting this month, Contemporary Amperex Technology (CATL), China's largest automotive lithium-ion battery maker, will supply power batteries for Tesla's Shanghai Gigafactory, the Beijing News quoted CATL sources as saying.

CATL revealed in February that it would be Tesla's battery supplier.

With CATL batteries, Tesla's prices in China could be further reduced. It is widely believed that CATL's power cells will provide the Tesla's domestic models much more competitive advantage.

The two sides have yet to reveal any specific details involving the battery type and other details.

Shenzhen-listed CATL shares went up by the 10 percent daily limit on the news.