LG Energy Solution to supply Tesla with electrodes worth billions

Tesla apparently wants to procure electrodes for its own battery cells from LG Energy Solution on a large scale. Korean media report that Tesla and LGES are planning to sign a supply contract worth 6 trillion won - the equivalent of around 4.1 billion euros - in the second half of 2024.

According to The Korea Economic Daily, delivery of the electrodes to Tesla will begin in 2025 and run for a period of six to seven years. The agreed quantity will be sufficient for the batteries of around 1.3 to 1.4 million electric cars per year. The newspaper quotes an insider as saying: “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.” Delivery will begin next year and is expected to take six to seven years, “which coincides with Tesla’s facelift release cycle”.

The Korea Economic Daily interprets the alleged order to mean that Tesla is moving forward with the production of its own batteries, as the subject of the order is a cell component and not finished battery cells.
Tesla is known to pursue several procurement channels in its battery strategy. On the one hand, the manufacturer traditionally procures battery cells from various suppliers – including LG Energy Solution, CATL and BYD. The longest and closest cooperation is known to exist with Panasonic: Tesla and the Japanese battery manufacturer jointly maintain a factory in Nevada.

Tesla is also pressing ahead with setting up its own production of 4680 battery cells at its plant in Texas. The 4680-format round cell presented at Tesla’s Battery Day in 2020 will be able to reduce battery costs by up to 50 per cent thanks to a number of innovations, such as the dry coating of the electrodes and the tabless design.

In February, rumours emerged that Tesla could expand its battery cell production in Nevada – with equipment from CATL. However, CATL would not be involved in the production itself. According to Bloomberg, the project is a planned battery production facility in Sparks, which is independent of Tesla and Panasonic’s Giga Nevada. Specifically, LFP cells for Tesla’s stationary Megapack batteries will be produced there.

hankyung.com (in Korean)