Tesla has signed a deal with South Korean giant LG Chem to supply some of its lithium batteries – despite up to now sourcing them almost exclusively from Japanese electronics mammoth Panasonic.
The deal is expected to strike a blow to Panasonic, which currently produces Tesla’s electric vehicle (EV) batteries in Osaka and has earmarked the automotive business as a growth area.
According to research company Techno Systems Research, Panasonic leads the industry in supplying automotive lithium-ion batteries with a 46% market share, followed by Automotive Energy Supply (a joint venture between Nissan and NEC) with 17%.
LG Chem comes in third with 11% of the market share, supplying more than 20 companies, including General Motors and Renault.
Last week, it completed a new facility in Nanjing, China, its third battery plant, bringing the total capacity of the company to the equivalent of 180,000 EVs a year.
Tesla announced last week that it might be planning to set up a ‘gigafactory’ in India to make lithium-ion batteries.
If the plan materialises it would boost Indian Prime Minister Narendra Modi’s push to get Tesla to share battery technology for powering homes in rural India.
During his visit to the Tesla campus in Silicon Valley last month, Modi discussed with Tesla founder Elon Musk the potential of setting up a battery-making facility, as well as initiatives in other renewable energy technologies, to address India’s power woes.
Modi has set an ambitious target of generating 100 Gw of solar power by 2022.