LG's plan to build a plant in the United States and Europe was revealed to produce brand new 4680 batteries for Tesla in 2023.

South Korea's LG Energy Solutions plans to produce new 4680 batteries for Tesla (Tesla) in 2023 and is considering building advanced lithium battery plants in the United States and Europe to allow Tesla to further expand capacity, according to two people familiar with the matter.

According to the plan, LG will produce 4680 batteries in the new US lithium battery plant and plans to build a 4680 battery production line in Europe to supply Tesla's electric car factory in Germany. Spain is said to be a site option for LG's European lithium battery plant.

It is understood that at present, the battery supply cooperation between Tesla and South Korean lithium battery giant LG Chemical Company is mainly in the Chinese market. One of the sources also said that Tesla and LG Chemical have not yet reached a cooperation agreement on lithium battery supply outside China.

Just last week, the South Korean battery maker told the media that it planned to build a plant in the US to produce batteries for electric cars and energy storage systems to meet the needs of US and global customers and start-ups. The company did not identify potential customers at the time, but a source said LG actually wanted Tesla to be able to purchase lithium batteries made in the United States.

Last September, Tesla CEO Elon Musk (Elon Musk) announced an ambitious plan to develop new batteries internally. The plan puts great pressure on suppliers such as LG Chemical and Panasonic because they either have to use more advanced technology to launch new products or will lose the big customer Tesla in the future.

LG Energy Solutions, a subsidiary of LG Chemical, has produced 4680 new battery samples, but the company still has challenges in achieving mass production, according to people familiar with the matter.

The source also said that although expanding the capacity of a single lithium battery unit is a step in the right direction, LG has never produced such a large lithium battery unit before, but "since Tesla is an important customer, LG is willing to take technological risks."

It is worth noting that LG's 4680 battery is still under development and has not yet received a purchase order from Tesla. According to the plan announced last year, Tesla plans to produce 4680 lithium battery units on his own, which aims to reduce costs, improve battery performance and increase the mileage of pure trams. This will help it to increase the production and market popularity of pure trams on a large scale around the world.

Since the beginning of this year, Tesla has begun to face competition from more and more new car-building companies, among which Lucid Motors has signed a procurement agreement with LG Chemical for many years. Peter Rawlinson, CEO of Lucid, recently revealed that he is considering whether to make his own lithium batteries and is interested in using different specifications of lithium batteries.

Caspar Rawles, an analyst at market research firm Mineral Intelligence, believes that in order to increase the production of new lithium batteries, Tesla either needs to speed up mass production or cooperate with external battery companies.