Rumor: Tesla to Acquire up to 10% Stake in LG Energy Solution, Soon to Separate from LG Chem

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Soon, LG Energy Solution—the battery division of LG Chem—will be separated from the parent company. Tesla is rumored to want to acquire a stake in LG Energy Solution to ensure a stable supply of batteries, The Korea Times reported.

"‘Tesla is looking to acquire a stake in LG Energy Solution. Specifically, Tesla is said to be exploring taking up to a 10 percent stake in LG Energy Solution,’ one source said on condition of anonymity as he wasn't authorized to speak officially to the media.”

Any direct investment in LG will help Tesla acquire suitable batteries for use in Tesla's electric vehicles without any major risks. Recently, Tesla CEO Elon Musk said that he did not intend to cut ties with partners in the supply of batteries, as the company would continue to increase production.

"‘It's quite early to tell if Tesla has an actual plan to acquire a stake in LG Energy Solution. But given Tesla's growing attempts at cost cuts and moves in producing round batteries, it does make sense that Tesla would explore an opportunity to buy a stake in LG Energy Solution,’ another source familiar with the issue added.”

Despite the fact that Tesla introduced its own production of battery cells, for the moment this is only a test line. In the near future, the company will not be able to produce battery cells on the scale it needs. The new partnership will help Tesla provide itself with the necessary amount of battery cells.

Currently, Tesla and Panasonic own Gigafactory, a joint venture for electric vehicle assembly and battery manufacturing in the United States.

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