Bloomberg News reported the plant will have an initial capacity of about 10GWh.
The move comes as regulation in the US restricts companies from depending on countries like China to source nickel, cobalt and lithium. CATL is Chinese.
This year, Tesla’s cheapest cars, the Model 3 compact, lost tax credits for the purchase of EVs under the Inflation Reduction Act, as new regulations on sourcing of battery materials kicked in.
Separately, Tesla was fined $1.5 million in a Californian court for improperly disposing of lead-acid batteries and other waste, according to reports. The LA Times said an environmental investigation by the San Francisco district attorney’s office began in 2018 and resulted in a combined prosecution by 25 district attorneys throughout the US state.
The company was given a five-year injunction. This includes training employees in how to dispose of hazardous materials correctly. Tesla must also engage an external contractor to audit some of its waste containers for hazardous materials.