LG Chemical plans to more than double China's battery production capacity, some of which support Tesla's plants in Germany and the United States.

SMM: in order to meet the growing demand of Tesla's business in China, LG Chemical plans to more than double its battery production capacity in China next year, according to media reports on Tuesday.

LG Chemical also plans to ship batteries from China and South Korea to Tesla's German and US plants, which means that LG Chemical has further increased its position in Tesla's supply chain, according to two people familiar with the matter.

As governments around the world step up efforts to encourage the development of electric vehicles, Tesla needs to ensure the supply of batteries at a time of rapid capacity expansion. "Tesla simply doesn't have enough batteries, so LG Chemistry has more than doubled production in China," said people familiar with the matter. "

The rapid growth of Tesla is a boon for suppliers such as LG Chemical, Panasonic and Ningde Times. LG Chemical has added production lines in South Korea this year, mainly to meet the needs of Tesla's American plant. Tesla has also asked Panasonic of Japan, a US factory supplier, to also supply the Shanghai plant, according to a person familiar with the matter.

LG Chemical and Ningde Times are both suppliers of Model 3 batteries from Tesla's Shanghai Super Factory. As the Shanghai plant begins to produce Model Y, Tesla's battery demand will further expand in the future, and the Model Y production capacity will reach 250000 vehicles in 2022. But people familiar with the matter also revealed that LG Chemistry was the only early supplier of Model Y batteries at the Shanghai plant.

"in response to the growing demand from carmakers, we will continue to expand cylindrical battery capacity, but we cannot comment on specific customers," said a spokesman for LG Chemical. LG Chemical said in October that it would triple cylindrical battery capacity to 60 gigawatts by 2023.