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Tesla Taps Chinese and Korean Suppliers to Boost New Battery Performance and Production

What This Means for the Company’s Future Production Plans

Ibrahim K

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Photo by Possessed Photography on Unsplash

Tesla is recruiting Chinese and Korean materials suppliers to develop cheaper and better batteries. This move comes as the electric-vehicle maker seeks to enhance the energy and reduce the cost of its latest battery cells.

The company has engaged Suzhou Dongshan Precision Manufacturing and Ningbo Ronbay New Energy from China to lower materials costs as it ramps up the production of 4680 battery cells in the United States. The details of these arrangements have not been disclosed to the public.

Tesla has signed a deal with Korea’s L&F Co to supply high-nickel cathodes that could increase the energy density of its 4680 cells. The automaker intends to add its own output with 4680 cells from LG Energy Solution and Japan’s Panasonic to secure future electric vehicle production. LG and Panasonic are expected to supply cells for the Cybertruck.

According to sources, Tesla had considered three battery options to ensure the launch of its new Cybertruck is not delayed: smaller 2170 cells used in other Tesla models, 4680 cells, and less-expensive lithium iron phosphate cells.

However, the company decided to wait until the 4680 cells are ready. If Tesla can meet its ambitious production targets and work out the performance and production issues of the 4680 cells, it could be the linchpin in CEO Elon Musk’s dream of producing 20 million vehicles annually by 2030.

Tesla’s Cybertruck battery strategy and other options have not been reported. Musk first announced the new 4680 cell at Battery Day in September 2020, where he promised a 50% reduction in cell cost through a series of innovations.

The company is still experiencing difficulties ramping up the first wave of production, which has delayed the introduction of the Cybertruck. Despite these issues, some analysts remain optimistic that Tesla will resolve them.

Panasonic is running a pilot 4680 production line at its Wakayama factory in Japan, with plans to start volume production later in the fiscal year that ends in March 2024.

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