Jyunjoo Jin has been hearing some interesting whispers in Korea about Tesla’s orders with LG Chem. Apparently Tesla is ordering a shit ton of cells. So many, that LG Chem will have to spool up new production lines in South Korea to complement the existing production in Nanjing, China.
South Korea’s LG Chem Ltd plans to start producing batteries for Tesla Inc vehicles at a domestic factory this year after the U.S. electric carmaker raised orders to cope with demand, a person familiar with the matter said on Friday.
“Tesla is asking not only LG Chem but other suppliers to increase supplies, as its cars are selling well,” the person told Reuters.Reuters
So… no demand, right?
Tesla’s current cell supplier partners are Panasonic (for cars made in Fremont), LG Chem (for cars made in Shanghai), and they’re working on some kind of integrated cell to pack thing with CATL that we don’t know much about yet but will be “not just for China” according to CATL’s CEO. Rumors that they’re increasing orders and asking their suppliers to expand is exactly what you hope to hear. Ramping cell supply is critical to the EV transition. The more cells you have, the more electric vehicles you can make.
A second person with knowledge of the situation also said LG Chem is converting some of its production in South Korea to produce batteries for Tesla. An LG Chem factory in Nanjing, China, already makes batteries for Tesla.Reuters
Converting existing production facilities in South Korea should allow them to ramp cell supply much faster. I know for China, electric cars can only qualify for some subsidies if they use a battery made in China. Could this possibly hint at Made in China Model 3 and Model Y being sold in other Asian countries besides China? As Tesla hasn’t announced plans to ship Model Y outside North America yet, maybe their plan is to deliver it from Shanghai to other Asian countries just like they’re planning to do in Europe.
I also wonder if these new cell lines in South Korea will be making the same cells made in China. Could these have some new technology? Maybe LG and Tesla were motivated somewhat by intellectual property concerns. Or maybe not. But who knows, this is all wild speculation.
All mysteries will be revealed on Tesla Battery Day, tentatively scheduled for September 15, 2020.