Rumor: Tesla asks suppliers for more batteries as demand surges

According to Reuters' unofficial sources, Tesla noted an increasing demand for its electric cars and asks the battery cell supplier for more cells.

Currently, the company has two major EV battery suppliers - Panasonic and LG Chem, with a smaller contract with CATL in the works. Panasonic produces cells for Model S and X in Japan and for Model 3 and Y in Tesla Gigafactory in the U.S., while LG Chem supplies Tesla Gigafactory 3 from its plant in Nanjing, China.

Reuters reports that LG Chem will also supply Tesla also from its plant in South Korea this year.

"South Korea’s LG Chem Ltd plans to start producing batteries for Tesla Inc vehicles at a domestic factory this year after the U.S. electric carmaker raised orders to cope with demand, a person familiar with the matter said on Friday.

“Tesla is asking not only LG Chem but other suppliers to increase supplies, as its cars are selling well,” the person told Reuters."

Tesla recently released surprisingly good production and sales results for the second quarter of 2020, and it's very likely that the batteries are still a constraining factor.

The report does not say anything about Panasonic, which in such circumstances would be expected also to increase production, especially in Nevada.

Assuming more than 125,000 EVs per quarter (to exceed 500,000 EVs annually) at an average of 75 kWh per pack, Tesla needs more some 10 GWh of batteries per quarter, plus the cells for energy storage (but those are way lower volumes).

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