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Tesla and LG Chem get closer with reports of new nickel-based battery supply deal

The relationship between Tesla and LG Chem appears to be growing stronger lately, and now we learn of a new deal for the latter to supply a nickel-based battery to the automaker, according to a new report.

Tesla and LG Chem’s relationship

For the first decade that Tesla was producing electric vehicles, Panasonic was the company’s exclusive battery cell supplier.

With the start of production at Gigafactory Shanghai, Tesla started to validate cells from other manufacturers, including LG Chem and CATL, for the production of the made-in-China Model 3.

More recently, Tesla also announced its plans to make its own battery cells, but at the same time, the automaker made clear that they would still try to secure as much battery supply from other manufacturers as they can.

While Panasonic still remains an important partner for Tesla, there have been rumors that the automaker is increasingly looking at LG Chem in Korea.

In September, shortly after Tesla held its “Battery Day” event, reports came out that Tesla is looking to acquire a stake in LG’s battery business.

Later, we also reported that LG Chem announced that it will produce a new battery cell with exactly the same specs as Tesla’s newly announced 4680 cell.

The Korean battery manufacturer also confirmed a plan to more than double battery production in China to support demand for Tesla‘s upcoming start of Model Y production at Gigafactory Shanghai.

A new battery supply deal

Now we learn of a potential new battery supply deal between the two companies.

The Korea Times reports that LG is going to supply a new NCMA battery cell to Tesla:

LG’s new battery business unit is set to become the first company to produce batteries with nickel, cobalt, manganese, and aluminum (NCMA) anode materials for EVs next year. LG Energy Solution is set to provide the NCMA batteries to Tesla, according to industry sources.

LG Chem refused to confirm or deny the report. They issued a comment to the publication:

 We cannot confirm this as we cannot specify the names of our clients.

The nickel-rich NCMA battery chemistry has been something that LG has been working on for a while now and it is expected to increase energy density of the cells.

Lately, Tesla CEO Elon Musk has been pushing for nickel producers to boost production as he expects the resource could become a bottleneck for battery production.

The report suggests that the new NCMA battery cells could be used in the Tesla Model Y produced in China.

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