It's high time for Tesla to develop a battery cell partnership in China.

Recent news via Reuters suggests that Tesla will develop a partnership to supply batteries for its Chinese operations. Reportedly, the Silicon Valley automaker is talking with China’s Tianjin Lishen. If substantiated, Lishen will provide batteries for its upcoming Gigafactory 3 in Shanghai. Sadly, as usual, Reuters only published information from the usual "people familiar with the matter."

As it goes, the two companies have already come to an early agreement. However, Lishen has no idea what battery size Tesla will require, nor the amount of cells required at this point.

Of course, Reuters goes on to say that the "details of the agreement were unclear." If you aren't well aware, there has become an increasing trend in which mainstream news media covers Tesla and other EVs on a more regular basis. However, they seemingly have no "real" clue about what's going on for sure. Instead, they just cover information gleaned from unnamed sources and call it news.

The bottom line here is that Tesla most likely wants to deal with battery cell supply on a local level. This is critical as it moves forward with its Shanghai Gigafactory. At some point, one would assume the automaker -- in partnership with a cell supplier -- could move forward on its own, so to speak. But, just like the U.S. situation with Panasonic, an integrated cell supplier only makes sense. Nonetheless, Tesla told Reuters:

We have not signed any agreement of any kind with them .

Lishen agreed that no contract or agreement is yet to be established.

Still, Musk tweeted in November that Tesla would locally source battery cell production at Gigafactory 3. He also included that the situation would probably include Panasonic as a partner:

Cell production will be sourced locally, most likely from several companies (incl Pana), in order to meet demand in a timely manner.

Panasonic revealed that it's considering the situation, but has come to no immediate decision.

Source: Reuters