LG hopes to produce new cells for Tesla in the U.S. and Europe in 2023
L.G. Energy Solution plans to start producing its advanced 4680 cells for Tesla in 2023, and is considering building production bases in the U.S. and Europe, according to two sources familiar with the matter, foreign media reported. One of the sources said that Tesla has yet to reach an agreement with L.G. to supply 4680 cells. If the deal goes through, L.G.'s role in Tesla's supply chain will expand beyond China.
Last week, L.G. told South Korean media that it plans to build factories in the U.S. to produce batteries for electric cars and energy storage systems to meet demand from customers and start-ups in the U.S. and around the world. The company did not specify its potential customers at the time, but sources said L.G. hoped Tesla would buy its batteries.
Last September, CEO Elon Musk announced plans for Tesla to produce its own 4680 cells, forcing suppliers like L.G. and Panasonic to embrace the unproven technology or risk losing Tesla, a longtime customer.
The sources said that L.G. has already made samples of 4680 cells, but the company still faces challenges in technology and scaling up production. Another person familiar with the matter said that while boosting cell capacity was the right thing to do, L.G. had never produced such large cylindrical cells. "Tesla is their main customer, so L.G. is willing to take the risk," he said.
"L.G. plans to manufacture the 4680 cells at its new U.S. facility," said a person familiar with the matter. They plan to build a new 4680 cell line to supply Tesla's Gigafactory in Berlin." He added that Spain would be one of the candidate sites for an L.G. Factory in Europe. He also revealed that L.G. had not received 4680 cell orders from Tesla. Currently, Tesla is significantly increasing orders for 2170 cells to secure supply for the domestic Model 3 and Model Y. L.G. declined to comment, and Tesla officials could not be reached.
Tesla developed the new 4680 cells to reduce production costs, improve battery performance, and increase vehicle range.
