LG Chem to expand battery production in China, for Tesla's needs
|South Korean company LG Chem plans to more than double the production capacity in China, designed for the production of battery cells for electric vehicles Tesla. This is planned to be done next year in order to keep up with the growing needs of the American customer. |
Batteries manufactured in China will be delivered not only to the Tesla gigafactory in Shanghai, but also to Tesla's plants in Germany and the United States. This indicates that LG Chem's position in the supply chain of the world's leading manufacturer of electric vehicles is strengthening.
According to informants, LG Chem has already added production lines at a factory in South Korea this year. This is mainly done to meet demand from the Tesla plant in the United States. In addition, the automaker asked Japanese company Panasonic, which supplies batteries to the Tesla plant in the United States, to also start deliveries to the Tesla plant in Shanghai.
Tesla buys batteries from LG Chem, Panasonic and Chinese company Contemporary Amperex Technology Co Ltd (CATL). In September, Tesla CEO Elon Musk announced plans to increase purchases and create its own production. The company believes that its own batteries will be cheaper than those purchased from third-party suppliers.
LG Chem's representative office in China recently confirmed that the company will invest $ 500 million over the next year to expand production of the 21700-type cylindrical battery cells used by Tesla at its Nanjing plant. After the expansion, the plant will be able to produce batteries with a total capacity of 8 GWh per year. Sources told Reuters that the plan calls for increasing the number of production lines from the current eight to at least seventeen.
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