(Yicai Global) April 6 -- Chinese battery giant Contemporary Amperex Technology has obtained approval to kick off production at its first overseas factory in central Germany, close to a plant of its biggest client Tesla.

A cell-producing part of CATL's Thuringia plant was approved recently and is expected to roll out its first battery parts by year-end, the Ningde-based firm said in a statement on its WeChat account today. CATL purchased another facility next door to turn the cells into modules. The plant is located 300 kilometers away from Tesla's Berlin Gigafactory.

Some industry insiders said that CATL's decision to start churning out cells in Germany may be linked to the US electric vehicle manufacturer's Berlin plant where production began on March 22. However, CATL has not commented on the matter.

CATL broke ground on the German plant in 2019. With a total investment of EUR1.8 billion (USD2 billion), the Chinese firm plans to achieve a production capacity of 14 gigawatt-hours while creating 2,000 jobs in the European country. The initial capacity is 8 GWh per year.

Tesla's orders make up a fifth of CATL’s total. CATL's batteries feature in China-made Model 3s and Model Ys, according to contracts penned in February 2020 and June 2021.

The pair's links are becoming stronger. Last August, CATL announced that it plans to invest CNY2.8 billion (USD439.9 million) to build a battery factory in the Lingang New Area of China Shanghai Pilot Free Trade Zone where Tesla’s first overseas Gigafactory is located.

Editor: Emmi Laine, Xiao Yi