Tesla seeks to acquire shares in LG battery business

SMM: Sept. 28, sources from the banking sector revealed that in order to obtain a stable battery supply, Tesla is seeking to acquire up to 10% of LG Energy Solution, which will soon be separated from LG Chemical.

LG Chemistry is a key battery supplier to Tesla and General Motors. The company had previously said it was the "best time" to spin off based on market conditions, so it decided to spin off its battery business in December. At present, the battery industry is growing rapidly, while the battery sector of electric vehicles is making structural profits.

From Tesla's point of view, direct investment in LG's battery business can help its battery procurement, thereby avoiding risks to the company's battery supply. Tesla CEO Elon Musk (Elon Musk) has previously said that Tesla is still very dependent on battery manufacturers, and there are great risks in increasing the capacity of independent batteries. Therefore, industry experts said that Tesla is likely to continue to cooperate with battery suppliers to complete battery innovation.

Tesla is trying to find a balance between battery size and capacity, with the goal of increasing the production of large-size batteries, according to a new report released by independent investment research firm Bernstein Research. Its future focus will shift from 18650 batteries to 21700 and 4680 batteries with higher capacity. The 4680 battery has a five-fold increase in energy and a 16% increase in mileage, and the 4680 battery is less difficult to make, fewer parts and shorter circuit length, which can reduce the heat generated by the battery.

Mark Newsman (Mark Newsman) of Bernstein said in a recent report: "as now, Tesla will hand over the battery manufacturing work to his partners instead of producing the battery core himself." Taking into account the risk of implementation, we believe that the possibility of this situation is very high. Tesla will invest in some battery manufacturing processes, but will continue to cooperate with battery manufacturers. "

Currently, Tesla and Japanese company Panasonic operate a joint venture factory in the United States to produce batteries. However, diversified battery procurement channels can help Tesla reduce procurement costs. Last week, Musk announced that Tesla will launch an electric car with a price of only $25000 in the next three years, and reducing battery costs is the most important way to reduce the price of electric vehicles.

LG Chemical's share of the global electric car market, which was 11 per cent last year, rose to more than 25 per cent in July, outpacing rivals Ningde era and Panasonic.