Chinese electric vehicle battery maker CATL has secured a battery supply agreement with Tesla, Reuters reports.

A stock exchange filing from CATL revealed that Tesla will determine how many batteries it purchases between July 2020 and June 2022. CATL added that the agreement doesn’t impose restrictions on Tesla’s purchase volume.

Speaking during the electric automaker’s recent Q4 earnings call, chief executive Elon Musk confirmed Tesla’s battery supply agreements with CATL and LG Chem are at a smaller scale than its long-standing relationship with Panasonic. Tesla secured a similar battery supply deal with LG Chem in August 2019.

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It is understood that the Californian electric carmaker is looking to build up a local supply of batteries in China that will power the vehicles manufactured at its Shanghai factory. This would allow Tesla to avoid shipping over Panasonic batteries from the company’s Gigafactory in Nevada.

Tesla intends on delivering at least 500,000 vehicles this year but is expected to actually build quite a lot more, Electrek reports. Securing battery supply at the Shanghai Gigafactory will help the car manufacturer achieve its production goals.

Shortly after the first Tesla Model 3s built at the company’s factory in Shanghai reached the hands of customers, Musk confirmed the site will also build the Tesla Model Y which the brand expects to outsell the Model 3, Model S, and Model Y combined. The factory currently has a production capacity of 150,000 units annually but that will grow to approximately 250,000 vehicles annually when local production of the Model Y commences.