LG Starts Producing Batteries for Tesla at its Korean Plant Later This Year

Lately, we’ve heard the news that Tesla had decided to change its plans to produce batteries in the German Gigafactory. An unexpected on-the-fly modification of having to import batteries from abroad. The question is from where. Now, a new piece of news gives us some clue as to where the shots might go in the Americans’ new strategy thanks to their latest agreement with the Korean LG Chem.

According to local media, LG will begin producing batteries for Tesla at one of its South Korean factories. A move that rumors indicate is heeding Elon Musk’s request for more supply to meet growing demand.

The point is that this production does not seem to be destined for units produced in China, where Tesla already has agreements with other companies. Including LG itself, which has a factory in the town of Nanjing.

Besides, batteries from outside China must pay fees to enter the Chinese market, which has been one of the reasons for the agreements signed by Tesla itself with different local suppliers. Something similar to what happens with production in the United States, powered by the Nevada Gigafactory that they have in collaboration with Panasonic.

Therefore batteries made in Korea will have to go to other markets. And all the bets indicate that they will be aimed at the European, whereas we recall Tesla prepares the commissioning of its installation initially planned for the summer of 2021.

But as we have seen in previous information, the works of this installation would be proceeding better than expected, even faster than the Shanghai factory. Indicating that Tesla is already preparing battery supply agreements for this installation and will not suffer delays with the start of production.

If this agreement with LG involves starting delivering batteries later this year, it will mean that Tesla will begin manufacturing at least in the pre-production phase in early 2021.

Of course, these are rumors and speculations that have not yet been confirmed by either LG or Tesla. But these have helped boost actions that yesterday has grown LG stocks 2.6%. That has helped maintain the meteoric progression of Tesla shares that have closed above 1,200 dollars, leading its market capitalization up to $ 224 billion.

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