With the trade-standoff between China and the United States of America tightening over time, a recent report by Reuters cites sources that say that Elon Musk’s electric car giant Tesla Inc (TSLA) received quotes from Tianjin Lishen for the supply of batteries to its new Shanghai factory. However, reports suggest that no deal has been inked between Tesla and the Chinese battery company.

Both companies have not gotten back on the specifics of the deal, the volume of batteries required, or the technical specifications of the materials involved.

Meanwhile, according to the news agency’s sources, Lishen had confirmed that it did not sign any agreement with Tesla regarding the supply batteries to the factory.

Tesla fast-tracks China program with plans to start delivery in March

It was only last week, on Friday in premarket trading, that Tesla saw its shares fall about 8% after it announced its decision to lay off 7% of its workforce to cut costs.

With a workforce of over 45,000 employees, Tesla reduction would affect over 3,000 employees. This was the electric car company’s second workforce reduction in the last year. Last June, Tesla cut its workforce by 9%.

Despite these possible setbacks, Elon Musk has the Chinese car market in the crosshairs. Tesla’s ambitious China initiative might have hit a roadblock as sales numbers for the fourth quarter fell short of expectations, they clearly show that the company is giving tough competition to the other carmakers in the Asian country.

Earlier in January, Tesla also confirmed that it was on track to begin the delivery of Model 3 sedan to buyers in China by March, in line with CEO Elon Musk’s earlier announcement. The Model 3 is expected to be priced at $72,000 initially in the country, despite headwinds from the US-China trade war.

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