LG Chem, a key battery supplier for Tesla with a backlog of orders worth more than $125 billion, will reportedly separate its battery business into a new entity, LG Energy Solution.
Tesla is reportedly looking into acquiring a stake in the soon to be formed company, according a report from The Korea Times.
“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,” said one source on condition of anonymity as he wasn’t authorized to officially speak to the media.
Based on the report, it appears the discussions are still in the very early stages, and things could change before a final deal is reached, if that ever happens.
“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 added.
LG Chem isn’t Tesla’s only current battery supplier. The automaker also has a deal with CATL, who recently developed LFP batteries that are rumoured to be entering production in China soon.
During the Battery Day event last week, Tesla CEO Elon Musk revealed his company will begin making its own batteries, having already started a pilot production line in California down the road from the Fremont facility. Musk also reiterated the automaker will still need to buy battery cells from third-party suppliers in the coming years to keep up with demand.
