LG Chem intends on more than doubling its production capacity of battery cells it makes in China for Tesla in 2021.
Tesla has ambitious plans to continue its ramp-up of production around the world and needs its battery suppliers to keep up.
According to Reuters, LG Chem will ship its increased output from China and Korea to Tesla’s factories in Germany and the United States. This move comes after LG Chem added production lines in South Korea earlier this year to meet demand from the automaker’s Fremont factory in California.
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“Tesla simply doesn’t have enough battery cells,” an individual with knowledge of the matter told Reuters. “So LG Chem is going to more than double China output.”
“We’re continuing to expand capacity for cylindrical battery cells in response to growing demand from automakers but we can’t comment on specific customers,” added an LG Chem spokesman.
Last week it was revealed that LG Chem will invest $500 million over the next year to raise annual production capacity of 21700 cylindrical battery cells at its Nanjing plant. This will see the number of production lines increase from eight to at least 17.
LG Chem currently supplies the battery cells to the Tesla Model 3 built in Shanghai. Each vehicle uses 4,416 battery cells and each LG Chem production line can produce up to 7 million cells a month. With 17 lines up and running, it will be able to cater to up to 323,000 vehicles annually. The company will also be the sole supplier of battery cells for the Model Y built in Shanghai, as well as handling the initial supply of battery cells for Teslas built at the Berlin plant.