FILE PHOTO: A Tesla Model 3 sedan is displayed during its launch in Hawthorne
A Tesla Model 3 sedan, its first car aimed at the mass market, is displayed during its launch in Hawthorne, California, U.S. March 31, 2016. (Photo: REUTERS/Joe White/File Photo)

Tesla is making deals with the Chinese company. It has been reported that the electric car company is talking with the top Chinese battery producer, Contemporary Amperex Technology Co. Ltd. The talk about the two companies is to supply cells for the Model 3 cars. It will be then be assembled at the new factory near Shanghai. 

Together with the Tesla officials, CATL has been discussing the required specs for the batteries., according to the people. They are asking that they will not be named as their talks are private. Thus, it is not yet sure that the arrangement will be reached, according to Bloomberg

Orders that come from a high-profile customer just like Tesla, can strengthen the CATL profile as one of the world's emerging battery manufacturer houses. The company is based in China's southern Fujian province. Thus, the company is on its way to become the biggest producers of lithium-ion batteries in China. 

According to a statement, CATL mentioned that the two companies have not yet reached an agreement. Tesla has not yet agreed to any cooperation or signed any business pact. The Chinese company did not say whether it is in a transaction with the US electric car company.The car manufacturer also declined to give a comment. 

The primary battery partner of Tesla is the US, Panasonic. However, the battery company is unlikely to support another Gigafactory's worth of production. Mainly, it would mean that there will be another Model 3 production line. Thus, the car company hopes to begin the production of Model 3 at their Gigafactory 2 at the end of 2019, according to CNET.  

In a recent report by Tesla, it stated that it had already secured one "qualified vendor" for the battery cells. This is for the Gigafactory 2. However, the report did not state who or which company is it. The electric car company did mention that they are still seeking a further vendor to help fill their orders. 

Last month, Tesla's CEO Elon Musk mad a surprise decision to cut down most of the company's stores. But he did walk back the plan late Sunday. The electric car company is sticking to plans that they will shift all sales to online ordering. The company will still shut down an untold number of stores for them to cut costs. 

Meanwhile, Tesla is still continuing to build a major facility near Shanghai. Despite the fact that the Electric car company has the worst car sales in China. Also, local Chinese manufacturers such as BYD Co. and NIO Inc. have already had a head start on building EVs locally.