Chinese largest battery supplier CATL has set up a production base in South Korea to offer batteries for Hyundai Motors, South Korean media outlet The Elec reported on Tuesday.

A source close to CATL said it is true, adding that CATL's batteries to Hyundai include ternary batteries and lithium iron phosphate batteries.

It's CATL's fifth overseas branch after Japan, Germany, the United States and France.

There are several local battery suppliers in South Korea, such as SK On, Samsung SDI and LG Energy Solution, a spin off from LG Chem. The participation of CATL in the South Korean market will aggravate the already fierce competition in the country.

In late October, CATL signed a technology licensing and partnership agreement with Hyundai Mobis, granting its cell-to-pack technology to the auto parts supplier.

CATL will also support Hyundai Mobis in the supply of related battery products in South Korea and globally, according to the agreement.

By directly integrating cells into packs without modules, CTP technology improves system energy density, simplifies manufacturing and helps reduce costs.

In February, Hyundai announced it had chosen both CATL and SK Innovation as battery suppliers for its E-GMP, and they will provide the third batch of lithium-ion battery cells for Hyundai's electric vehicles that launch after 2023.