LG Energy Solution To Supply Tesla Inc.’s (NASDAQ:TSLA) New Battery Cells
According to people familiar with the matter, Tesla Inc. (NASDAQ:TSLA) new battery cells could come from LG Energy Solutions, which is expanding the supply chain beyond China. Currently, LG supply Tesla in China, but this could change as the company wants to expand production to new sites in Europe and the US.
LG expanding its EV supply chain to the US
LG expects to develop advanced battery cells for electric car manufacture in 2023. However, Tesla, which doesn’t have a public relations department to respond to field requests, and LG are yet to comment on the development. Notably, Tesla is yet to sign an agreement that will see LG expand the supply chain. Interestingly, Tesla’s “Biscuit Tin” cells are all-or-nothing for the Korean battery manufacturer because Tesla has previously indicated that it will develop the new tech in-house. LG had to embrace the new tech or risk losing the EV manufacturer as a customer.
Recently, LG announced plans to construct a US factor to produce battery cells for electric vehicles and energy storage systems for US and global clients. At the time, LG didn’t identify its potential customers, but a source indicated that it was banking on Tesla being one of the customers. Besides the US factory, LG is also planning to build a Spain site to support Tesla’s upcoming factory in Berlin, Germany.
LG to join Panasonic in supplying Tesla batteries in the US
If LG manages to expand its battery cells manufacturing operations to the US, it will be a second supplier for Tesla’s EVs in the US market. Currently, Panasonic is the main source of Tesla’s EV batteries and has adapted its manufacturing tech for the new Tesla battery cell design at its Nevada Gigafactory. Tesla also sources its electric car batteries in China from CATL.
Besides Tesla, LG also expects to supply General Motors Corp (NYSE:GM) and will soon wrap up production for its new battery factory in Lordstown, Ohio, to supply GM’s EVS. The companies are looking at a second US plant in Tennessee.