The production capacity of LG Chem’s batteries in China will double next year

South Korean LG Chemical Company (LG Chem) in China for the electric vehicle manufacturing battery plant of the Tesla company, scheduled for next year, according to reports, would more than double the battery production size to match the rise in Tesla China, the world’s largest automotive sector.

15:32 GMT, Tuesday, December 1, 2020

LG Chem is a battery supplier manufactured at Tesla’s Shanghai Electric Vehicle Manufacturing Plant for Model 3 vehicles. LG Chem’s recently expanded production in China and South Korea will also be supplied to Tesla’s plants in Germany and the United States, according to reports. Usage. Usage. This move demonstrates that in Tesla’s supply chain, LG Chem can play a growing role.

The market demand for electric cars is increasing as policymakers accelerate the use of clean energy vehicles to combat air pollution. Tesla is expanding its market internationally, and one of the battery supply promises in Tesla’s global growth policy is LG Chem’s initiative to increase battery manufacturing capability in China’s factories.

Sources said that this year, LG Chem added several production lines in South Korea, primarily to satisfy the needs of the US plant in Tesla. Moreover, Tesla demanded that Japan’s Matsushita, which supplies its US factories with batteries, also supply Tesla’s Shanghai plant.

“Tesla’s battery supply is not sufficient.” The source said As a result, LG Chem’s production in China will have to double.”

A boon for LG Chem, Panasonic and Chinese supplier CATL is the growth of Tesla’s business. Tesla’s CEO, Elon Musk (Elon Musk), announced in September this year that the company would increase its battery purchases.

Musk also believed, however that the availability of batteries was inadequate and declared that Tesla was intending to manufacture cheaper batteries on its own. The battery purchasing control of the retailer will be undermined if Tesla manufactures its own batteries.

A spokesman for LG Chem said We are continuing to expand the production capacity of cylindrical batteries to meet automakers’ increasing demand.” But when it comes to providing Tesla with batteries, the spokesman said that the company was mistaken. Relevant customers comment.

In October, LG Chem said that its cylindrical battery size would triple to 60 GWH by 2023. This is the first media story about the company’s batteries made in China and South Korea that will be shipped to Tesla’s German and American factories.

The media did not immediately get a response from Tesla in reaction to the above reports, and Panasonic refused to comment.

LG Chem will spend US$500 million in the next year to expand the production capacity of its Nanjing plant by 8 GWH, according to the Nanjing government. The new plant capacity, however, has not been revealed.

The source told the media that the proposal entails rising the number of lines of output from 8 to at least 17.

Both LG Chem and CATL are battery suppliers provided by Tesla’s Shanghai plant for the Model 3 sedan. This sedan’s production began last year, and the total annual capacity has reached 250,000. Tesla’s aim is to start manufacturing Model Y sport utility vehicles at its Shanghai plant next year according to media reports. By 2022, this vehicle’s manufacturing capacity will exceed 250,000.

The 17 production lines of LG Chemical’s Nanjing plant will be able to satisfy the need for batteries for 323,000 Tesla electric vehicles a year according to media estimates.

The source also said that LG Chem would initially be the only supplier of electric Model Y vehicles assembled by Tesla’s Shanghai factory. In this respect, the Ningde era did not receive immediate comments from the public.

According to reports, the batteries for the initial development of electric cars will also be supplied by LG Chem’s Chinese plant when Tesla’s Berlin plant in Germany is put into production.