BYD will supply its "blade battery" to Tesla in the second quarter of next year, local Chinese media cls.cn said Thursday, citing multiple sources familiar with the matter.

The Tesla model with the "blade battery" is now in the C sample testing phase, the brief report said.

BYD said it had "no comment", according to the report.

The "blade battery", unveiled in March last year, is a power battery that BYD claims will not catch fire, and was first used in the flagship Han EV model.

The battery has not previously been available to other companies due to capacity constraints. But recent indications are that its capacity has increased significantly, and the company is still building a lot of new battery capacity.

Late last month, Jiemian.com reported that BYD's entire pure electric car lineup is now equipped with blade battery.

BYD also said it is now aggressively expanding capacity to handle future sales increases and supply to external customers, the report said.

In April, the second phase of BYD's power battery production base project was launched, with six new blade battery production lines to be built, according to Chongqing Daily.

The first and second phases will have an annual production capacity of 35GWh at full capacity and an annual output value of 30 billion yuan ($4.6 billion), the report said.

On July 15, BYD and the government of Changchun, Jilin Province in northeast China, and FAW Group signed an investment cooperation agreement to establish a power battery production base in Changchun.

On Aug. 3, BYD set up a new battery company in China's eastern Anhui province, according to data provider Qichacha.

The company is called Wuwei Fudi Battery Co. Its business scope covers battery manufacturing and sales, research and development of new material technologies, and manufacturing, sales and research and development of electronic special materials.