Tesla is about to start production at Tesla Gigafactory 3 in China and now a report states that LG Chem started mass production of battery cells to supply the factory.
Interestingly, the report states that Tesla is switching to NCM battery cells for China-made Model 3.
At first, CEO Elon Musk said that all of Tesla’s new factories, including Gigafactory 3 in China, will include the production of both battery cells and full vehicles, but it appears that the company had to change those plans when it came to Gigafactory 3.
Due to the uncertainty that has come with the trade war between China and the Trump administration, Tesla decided to accelerate its plan to establish manufacturing capacity in China in order to avoid increasing tariff on US vehicles.
In order to accelerate those plans, Tesla decided to hold off on battery production and instead, they plan to work with suppliers.
Musk said last year:
“Tesla will manufacture all battery modules and packs at China Gigafactory, as we do today in California & Nevada. Cell production will be sourced locally, most likely from several companies (incl Panasonic), in order to meet demand in a timely manner.”
Last month, it was reported that Tesla came to an agreement with LG Chem to supply Gigafactory 3 with cells made at their factory in Nanjing, which is about 200 miles (320 km) west of Shanghai.
Now a different report from tech news publication ‘the Elec’ in Korea, where LG Chem is based, states that the battery manufacturer started to “mass produce batteries for Tesla’s Model 3 electric vehicles from its Nanjing plant in China” last week.
According to the report, Tesla will now be getting NCM battery cells from LG:
“LG Chem convinced Tesla to switch to NCM811 batteries based on the longer driving distances per charge. It also hinted that it may be able to begin mass producing NCMA batteries, which is even higher in nickel, beginning in 2022 to apply to EVs.”
Tesla consumes both NCA and NMC battery cells, but they only use the former for their electric vehicles and the latter for stationary energy storage products, like Powerwalls and Powerpacks.
If the new report is accurate, it would be the first time that Tesla uses NMC battery cells in its vehicles.
It’s not confirmed yet. I’d take the report with a grain of salt until we get a second confirmation.
However, this is the second report that states that Tesla is working with LG Chem to supply battery cells to Gigafactory 3 and it is starting to sound accurate.
I also don’t find it too surprising that Tesla would switch to NMC cells.
We recently reported on Tesla applying for a patent for a new longer-lasting battery cell with better performance and it is based on an NMC battery cell and they said it could be used both in stationary energy storage products and electric vehicles.
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