Tesla has added Chinese battery manufacturer Sunwoda to its global battery supply chain, Chinese media outlet 36Kr reported on Thursday, citing multiple industry sources, as the U.S. electric vehicle maker seeks to diversify sourcing and lower costs.
Through its battery unit Sunwoda Electric Vehicle Battery Co Ltd, Sunwoda has become Tesla’s fifth global power battery supplier, according to the report.
Battery cells from Sunwoda have already begun shipping from the supplier’s plant in Yiwu and are being installed in vehicles produced at Tesla’s Giga Shanghai for export markets, 36Kr reported, citing people familiar with the matter.
It remains unclear when the batteries may be used in Tesla vehicles sold domestically in China, the report said.
Under the arrangement, Tesla is purchasing battery cells directly from Sunwoda and assembling battery modules and packs itself, marking a shift from its previous approach of sourcing modules from supplier CATL in the prismatic battery segment, according to 36Kr.
The report said the move would give Tesla greater control over battery costs while further diversifying its supply chain beyond CATL, its primary Chinese battery partner.
Chinese automaker BYD previously supplied batteries to Tesla’s European operations, though 36Kr said there has been limited progress in expanding that partnership.
Battery procurement costs account for more than 30% of vehicle production costs, according to the report. Tesla’s automotive revenue fell 10% year-on-year to $69.526 billion in 2025, while automotive gross margin excluding regulatory credits declined to 15.4%, the report said.
The batteries supplied by Sunwoda use third-generation lithium iron phosphate chemistry and support charging rates of up to 3C, aligning with industry trends toward faster charging, 36Kr reported, citing people familiar with the matter.
Sunwoda has previously supplied battery products to several Chinese automakers and established a joint venture with Li Auto.
Sunwoda EVB filed for a listing in Hong Kong in July last year. According to its prospectus, the company generated 56 billion yuan ($8.2 billion) in revenue in 2024.
Separately, Sunwoda recently settled a battery quality dispute with a subsidiary of Geely involving claims of up to 2.31 billion yuan, with the settlement expected to affect 2025 net profit by 500 million yuan to 800 million yuan, according to company disclosures.