In a strategic move towards enhancing its battery production capabilities, Tesla is reportedly poised to sign a substantial supply contract with LG Energy Solution. According to sources cited by The Korea Economic Daily, the contract, valued at approximately 6 trillion won (around 4.1 billion euros), is expected to be finalized in the second half of 2024.
The agreement is purported to include the delivery of electrodes to Tesla starting in 2025, spanning a duration of six to seven years. This quantity of electrodes would be adequate for the batteries of approximately 1.3 to 1.4 million electric vehicles annually. An insider revealed to The Korea Economic Daily, “Tesla’s purchasing team recently ordered 6 trillion won worth of electrodes from LG. Detailed talks are currently underway and a contract is expected to be signed in the second half of the year.”
This development signifies Tesla’s progression towards producing its own batteries, as the order pertains to a crucial cell component rather than fully assembled battery cells. The Korea Economic Daily also noted that Tesla employs a multifaceted approach in its battery strategy, sourcing battery cells from various suppliers including LG Energy Solution, CATL, and BYD.
In addition to external procurement, Tesla is advancing its in-house battery production capabilities, particularly with its 4680 battery cell format. This innovation, showcased at Tesla’s Battery Day in 2020, promises to slash battery costs by up to 50% through advancements such as dry electrode coating and a tabless design.
Moreover, Tesla is rumored to be expanding its battery cell production in Nevada, potentially involving equipment from CATL. However, CATL’s role, if any, would not extend to direct production. The project, as reported by Bloomberg, pertains to a planned battery production facility in Sparks, focusing on producing LFP cells for Tesla’s stationary Megapack batteries.
