China's Contemporary Amperex Technology Co Ltd, a battery supplier to Tesla Inc (TSLA) and Nio Inc (NIO), is planning to raise up to $9 billion in a private share placement, Reuters reported on Thursday.

What Happened: CATL aims to fund six projects aimed at lifting the production capacity of lithium-ion batteries, with the amount raised. The move comes at a time when CATL is expanding battery manufacturing capacity across China and in Germany.

The funding will also be used to build several battery factories in Fujian, Zhejiang, and Guangdong provinces in China besides developing battery technologies for energy storage facilities, Reuters noted.

Why It Matters: Battery suppliers are adding capacities as automakers across the globe make a dash to either switch to electric vehicles or expand the existing electric lineup. 

CATL, which also supplies batteries to Volkswagen AG OTC (VLKAY), was earlier reported to be planning a major new automotive battery plant in Shanghai, which would be able to produce 80 gigawatt-hours of battery cells a year, in addition to the 69.1GWh in current production capacity and another 77.5GWh under construction.

Tesla has a manufacturing facility in Shanghai, which it opened in 2019. The facility started delivering China-made Model 3 cars last year and China-made Model Y vehicles this year.

The ramp-up plan is also likely to add to competitive pressure on Panasonic Corp (PCRFY) and LG Chem's LG Energy Solution unit, which are Tesla’s other battery suppliers.

Price Action: Tesla shares closed 2.04% higher at $722.25 on Thursday.