LG Chem to supply battery cells for Tesla’s Model Y electric SUV in China

LG Chem to supply battery cells for Tesla’s Model Y electric SUV in China

Elon Musk’s electric vehicle (EV) major Tesla Motors has reportedly signed an agreement with Korean chemical giant LG Chem Limited to supply battery cells for the production of its Model Y electric SUV in China.

For the last many months, Tesla Motors has been expanding its massive manufacturing plant in China, which is commonly known as Gigafactory Shanghai, to produce and supply EVs like the Model Y to local and foreign markets. Now, emerging media reports are claiming that Tesla has signed a multi-year deal with LG Chem to supply battery cells for the production of the Model Y in the world’s most populous country.

The reports, published by both Chinese and South Korean media outlets, are also claiming that LG Chem has been chosen by Tesla as the sole battery supplier for the mass-production of the Model Y in China early next year.

Tesla has plans to start producing the Model Y electric SUV at its Gigafactory Shanghai within the coming few months, with deliveries planned to start sometime in the first quarter of 2021. After experimenting with various battery options for its EVs, the American car maker is reportedly going to opt for cylindrical nickel, cobalt and manganese (NCM) batteries for Model Y electric SUV, which claims to offer maximum versatility with the capability to carry seven passengers and their cargo. It adopted cylindrical NCM batteries for the new SUV model.

It may be noted here that Tesla has chosen LG Chem as its battery supplier for the Model Y SUV by excluding China’s Contemporary Amperex Technology Co Ltd (CATL) and Japan’s Panasonic. CALT has supplied battery cells with LFP chemistry for Tesla’s comparatively cheaper EV Model 3 sedan, while LG Chem supplied batteries for the company’s longer range and more expensive EVs.

It is also worth-mentioning here that Tesla’s new deal with LG Chem surfaced amid reports that the South Korean battery manufacturer’s faulty batteries were the reason of fires in some of the Hyundai Kona EVs and Chevy Bolt EVs in the recent past.

The Palo Alto-headquartered EV manufacturer has recently announced a project to produce its own battery cells to support its EV programs but it will likely take years to produce desired results. Thus, the EV giant will continue to use their services of a mix of suppliers for the predictable future.