Tesla Considers $4B Deal with LGES for 4680 Battery Components: Report

Tesla may be considering purchasing electrodes for its 4680 battery cells in large quantities from LG Energy Solution. Korean media reported that Tesla and LGES are planning to enter into a supply deal worth more than $4 billion.

According to information from insiders, the signing of the deal is possible in the second half of 2024. Delivery of electrodes is planned to begin in 2025 and last for six to seven years. The agreed number of batteries will power approximately 1.3-1.4 million electric vehicles per year.

“Tesla’s purchasing team recently ordered 6 trillion won worth of electrodes from LG. Detailed discussions are currently underway and the contract is expected to be signed in the second half of the year,” the insider said.

The fact that Tesla is ordering battery components indicates that independent production of 4680 cells is gaining momentum. The company aims to produce millions of electric vehicles every year, and batteries of course are a key component. In parallel with its own production of 4680 cells, Tesla will also order them from suppliers. Additionally, the company buys other types of batteries from LG Energy Solution, CATL, and BYD. The company jointly operates a factory in Nevada with Panasonic, where it also produces battery cells.

Currently, the production of 4680 cells is being actively ramped at Giga Texas. During the Q4 2023 earnings call, Tesla’s Vice President of Supply Chain, Karn Budhiraj, provided some details about the number of production lines and planned expansions. According to him, Tesla is “currently running one production line, one assembly line, using two assembly lines in addition for yield and rate improvement trials.” The fourth line is at the commissioning stage, indicating a large production scale. However, four more will be installed starting in Q3 2024, making this year a turning point in ramping up production of 4680 battery cells.

Previous Article

Tesla Cuts Prices Globally Following US Price Cuts

Next Article

Tesla Model 3 Performance gets up-close walkaround ahead of debut [Photos & Video]

You might be interested in …