LG Chem

Tesla China-Made Model Y to Use LG Chem Batteries for Giga Shanghai Production

Tesla China-Made Model Y to Use LG Chem Batteries for Giga Shanghai Production

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Tesla has struck a deal with LG Chem to supply batteries for its Model Y, which will be manufactured at Giga Shanghai in China. According to a number of foreign publications, LG Chem is currently the only battery supplier for the future model.

In this deal, LG Chem outpaced strong competitors such as China's Contemporary Amperex Technology Co. (CATL) and Japan's Panasonic Corp., industry sources said on November 20.

The cost of the deal was not disclosed, however, based on the expected annual sales of the model, the contract is estimated at approximately $2.7 billion per year. Under the deal, LG Chem will supply lithium-ion batteries, known as NCM (nickel cobalt manganese) batteries, for the Model Y, which is slated to start mass production in Shanghai in Q1 2021, sources said.

CATL was named one of the strongest candidates but was excluded as a supplier because it focuses on another type of battery—LFP (cobalt-free lithium-iron-phosphate).

LG Chem executives said last month that the company is working on a new form factor cylindrical cell, sparking rumors in the market that the company may supply a new type of battery to Tesla.

© 2020, Eva Fox. All rights reserved.

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About the Author

Eva Fox

Eva Fox

Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.

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