Tesla has widened its power battery sourcing in China by formally designating Sunwoda Electric Vehicle Battery Co Ltd (Sunwoda EVB) as a global supplier, according to a report by Chinese tech outlet 36Kr. Industry insiders confirm that Sunwoda EVB now stands as Tesla’s fifth power battery provider on a worldwide scale.

The initial shipments have already departed Sunwoda’s production base in Yiwu, Zhejiang province, and the cells are presently being fitted into vehicles assembled at Tesla’s Shanghai Gigafactory for export markets. There remains no official schedule for their inclusion in cars sold within China.

Under this new agreement, Tesla is acquiring bare battery cells directly from Sunwoda EVB and managing the module and pack assembly in its own facilities. This marks a departure from Tesla’s established routine of buying fully assembled modules from longtime partner CATL and signals the automaker’s first direct relationship with a prismatic-cell producer. The move grants Tesla greater oversight of battery expenditures and production workflows.

Broadening its supplier network has been a key strategic move for Tesla, which has been exploring alternatives to CATL while holding preliminary discussions with BYD regarding potential European operations. Power battery purchases still constitute more than 30 percent of a vehicle’s manufacturing expense. In 2025, Tesla’s automotive revenue slipped 10 percent year-over-year to $69.5 billion, and its automotive gross margin—excluding the benefit of regulatory credits—sat at 15.4 percent, a considerable drop from its 2021 high. This environment has intensified the company's push to strengthen its supply-chain bargaining power.

The cells provided by Sunwoda EVB utilize third-generation lithium iron phosphate (LFP) chemistry and are rated for charging speeds of up to 3C, meeting the rising industry appetite for ultra-rapid charging technology. Sunwoda has cultivated its market position through competitive cost structures and service offerings, and it already operates a joint venture with Chinese EV manufacturer Li Auto.

Sunwoda EVB submitted an application for a Hong Kong listing last July, disclosing total revenue of 56 billion yuan for 2024. The company recently resolved a battery-quality dispute with a subsidiary of Geely, which had involved claims of as much as 2.31 billion yuan. The settlement is expected to impact net profit attributable to shareholders by an estimated 500 million to 800 million yuan in 2025, with all battery packs involved in the case remaining the property of Sunwoda.