LG Chem Begins Production Of High-nickel Batteries In Nanjing And Will Supply Domestic Tesla

- Sep 24, 2019-

According to the latest news from foreign media, LG Chemical Co., one of the global lithium battery manufacturing giants, has begun mass production of 21700 lithium batteries used in Model 3 at its plant in Nanjing, China.

It is reported that Tesla has listed LG Chem as one of the battery suppliers for its Shanghai electric vehicle factory. Before signing a contract with Tesla, LG Chem used its NCM 811 battery for electric buses, and Model 3 was the first car to use these special batteries. According to industry insiders, LG Chem can convince Tesla to choose its NCM 811 battery because the company guarantees that these batteries will maximize the Model 3's cruising range.
This is critical for Tesla's production of Model 3 at its plant in Shanghai, China, where Tesla is only preparing to produce the popular Model 3 (ie not including the other two luxury electric vehicles Model X and Model S). If Tesla can prove to Chinese consumers that the locally produced Model 3 can have industry-leading cruising range, this model will be able to gain consumer welcome and purchase demand in the Chinese market.

According to reports, with Tesla becoming a customer of its Nanjing plant, LG Chem has begun preparing production facilities to best meet the needs of this electric vehicle manufacturer.

LG Chem's plant in Nanjing is already operating at a high level. Earlier this year, the Korean conglomerate announced that it would invest 1.2 trillion won ($1 billion) to further expand its production capacity. But this is not all. According to Tesla's request, more battery capacity expansion is expected.

Interestingly, the Korean technology media quoted insiders as saying that LG Chemical is also seeking to mass produce NCMA electric car batteries from 2022. According to reports, these upcoming batteries will have a higher nickel content.

The report on LG Chem's cooperation with Tesla first appeared in August last year, when a US financial media reported that the battery manufacturer and the electric car company were discussing the establishment of a potential partnership. If the recent reports from South Korea are accurate, the cooperation between the two companies seems to have been guaranteed, and the two companies seem to be working together to lay the foundation for the production of the Model 3 model at the Shanghai plant.
LG Chemical Nanjing Battery Factory is strategically located. The plant is located approximately 320 kilometers west of Shanghai, which will make the delivery of batteries to the Tesla Super Factory in Shanghai's Lingang Industrial Zone a fairly simple task.

First, the distance between the two factories in China is much lower than Tesla's lithium battery plant in Nevada, USA (which produces 2170 models for Model 3) and the Fremont, California plant that assembles the model. distance.

Other media reports also indicate that Tesla's Shanghai electric vehicle factory will not be fully supplied by LG Chemical Company. In addition to the Korean battery manufacturer, Tesla is reported to be a supplier to China's local lithium battery manufacturer Ningde Times.

So far, Tesla and Ningde have not confirmed that they have established a battery partnership for the operation of the Shanghai electric vehicle factory.

It is well known that in the production and supply of lithium batteries, Tesla's largest partner is Matsushita of Japan, and the two companies cooperate to operate the lithium battery factory in Nevada. But there are various signs that there are some problems or differences in the cooperation between the two companies. Today, the construction of the Nevada lithium battery factory has not been completed, and the production capacity has not reached the planned level. It is reported that Matsushita believes that the demand for lithium batteries from Tesla is not enough, so it has not actively expanded its production capacity.

Last year, Panasonic also said that with Tesla's electric vehicle plant in Shanghai, China, Panasonic and Tesla can also jointly produce batteries in China.