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Tesla has been in advanced discussions with LG Chem on battery power in China: source

(Reuters) – U.S. electric car maker Tesla Inc. (TSLA.(O) is in advanced talks with South Korea’s LG Chem Ltd (051910.CS source is the batteries for the cars made in Shanghai plant, a person familiar with the matter said.

A FILE PHOTO of Tesla’s super chargers will be shown, in Mojave, California, USA July 10, 2019 at the latest. REUTERS/Mike Blake

The move represents a push by Tesla to the diversification of the sources of the main components of the electric vehicle. The japanese Panasonic Corp (6752.(T), it is currently Tesla’s exclusive battery cell supplier for the new car.

Bloomberg reported Friday that the California-based EV maker, has agreed to buy batteries from LG Chem, citing people familiar with the matter. The batteries will be made by the South Korean chemical company, will, in the first instance, to be used in the Model 3 car, which will be produced at the plant in the vicinity Shanghai, the report said.

LG Chem is expanding in China, the battery capacity and the amendment of certain production facilities, to create a different type of automotive batteries, according to the source.

The company is, at present, especially the pouch-type batteries, and any other types of batteries, but with a major battery maker, and it is not hard for the renewal of the facilities for the creation of a cylindrical car for the batteries that are used to Model the source and to separate those who are acquainted with the matter added.

The source, who spoke on condition of anonymity as the talks are not public, said the Model is still a chance to use the Panasonic batteries in the early phase of the production, and the resource of other providers, including the local names will be in the future.

Tesla did not immediately respond to Reuters’ request for comment. LG Chem declined to comment.

LG Chem has signed a battery of equipment supply contracts with China Huayou (603799.SS), and Tianqi (002466.The SS, as well as the Korean battery maker was in the process of expanding its position in China. It is said that it could be the setting up of a joint venture with a unit of china’s Geely [GEELY.UL] on batteries.

It has been abolished, the so-called “white list” of recommended battery pack from the vendors, which are not foreign corporations for the first time, will be published in 2015, is to foster a domestic battery industry), a decision of foreign companies to be able to open up to the world’s largest market for electric vehicle batteries.

Panasonic has said that it was able to supply batteries for Tesla’s China plant, or in Japan, and the United States of america and China.

Tesla’s Chief Executive Elon Musk said in November the AMERICAN company in the manufacture of battery modules and packs at the Shanghai plant, and is scheduled to be the diversification of supply sources.

Reporting Yilei Sun, in Shanghai, Aakriti Bhalla, Bengaluru and Ju-min Park in Seoul; Editing by Sherry Jacob-Phillips and Muralikumar Anantharaman

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