China: LG Chem To Double Battery Cell Output To Meet Tesla Demand12/01/2020
LG Chem might soon become a bigger battery cell supplier to Tesla than Panasonic.
According to an exclusive report from Reuters, unofficial sources indicate an upcoming huge increase of battery cell production by LG Chem to meet Tesla demand.
Tesla needs significantly more cylindrical battery cells in China, as it increased production of the MIC Model 3 as well as it’s introducing the MIC Model Y (for which LG Chem is a major supplier). But not only that, the company reportedly will use LG Chem cells also in Europe (in Giga Berlin) and in the U.S.
LG Chem will invest some $500 million in its lithium-ion battery factory in Nanjing, China that is making 2170 cylindrical NMC cells for Tesla. According to Reuters, the plan is to add some 8 GWh of annual capacity over the next year through an increase of the number of production lines from 8 to 17.
“Each model [Model 3] uses 4,416 battery cells, and each LG Chem line is able to produce up to 7 million cells a month, one of the people said. LG Chem’s 17 lines in Nanjing would therefore be able to cater for up to 323,000 vehicles a year, a Reuters calculation showed.”
That should be enough for most of the MIC Model 3/Y that will be produced at the Tesla Giga Shanghai plant. The entry-level MIC Model 3 is equipped now with LFP cells from CATL.
In general, LG Chem is expected to more than double its output in China, and interestingly, ship battery cells from China and from South Korea plants to Tesla factories in Europe and U.S. The company has local battery plants in Europe (Poland) and in the U.S. (Michigan), but we guess not for the 2170 cylindrical cell type.
This throws new light on the Tesla/Panasonic partnership. There are rumors that Panasonic also was asked to increase output.
“LG Chem has already added production lines in South Korea this year mainly to meet demand from Tesla’s U.S. plant, the people said. Moreover, the automaker has asked Japan’s Panasonic Corp – which supplies the U.S. plant – to also supply its Shanghai factory, said one of the people, who declined to be identified as the matter was confidential.”
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