U.S. electric carmaker Tesla has signed a three-year agreement to purchase battery grade lithium hydroxide from producer Ganfeng Lithium, the Chinese supplier this afternoon announced.

With Chinese auto industry website Gasgoo on Friday reporting Elon Musk‘s Tesla had placed an order for 45 GWh worth of lithium iron phosphate batteries from Chinese manufacturer CATL, the deal announced by Ganfeng today backed expectations Tesla may expand the annual production capacity of its battery gigafactory in Nevada to more than 40 GWh.

Ganfeng today told the Hong Kong stock exchange it would begin supplying the products from January 1 with the order volume and price to be determined by Tesla's purchase orders.