Demand for electric vehicle batteries has continued to skyrocket in recent months, as suppliers rush to sell batteries to Tesla and other automakers amidst a growing market. In a recent announcement, one key Tesla battery supplier shared major investment plans to upgrade battery cell production at one of its factories.
Above: A Tesla Model Y inside a store. (Image: Tesla)
Korean battery manufacturer LG Energy Solution announced plans on Monday to invest KRW 4 trillion (~$3.1 billion) into a factory in Ochang, creating a “smart factory” for producing EV batteries, according to Teslarati. The investment will continue from now until 2026, and will oversee the development of an R&D program, production hardware, infrastructure, and seemingly even plans for volume production of the long-awaited 4680 battery cell.
“We plan to set up a diversified product portfolio including pouch-type and cylindrical batteries to respond to customer needs in a timely manner and differentiate production capabilities based on a ‘smart’ factory,” an LG Energy spokesperson said.
The cylindrical, next-generation 4680 battery cells have been in development for years now, and past reports seemed to suggest that LG would be producing the hardware at its Ochang plant. The recent statement echoed claims in February, in which LG said it was hoping to diversify its lineup of cylindrical batteries.
Months later in June, LG announced an investment of KRW 580 billion (~$450 million) to add a 4680 assembly line at its second Ochang plant, featuring a production capacity of 9 GWh. Additionally, the announcement included LG’s plans to increase the production of last-generation 2170 battery cells at its first Ochang plant by 4 GWh.
South Korea has also reportedly been a candidate for Tesla’s next Gigafactory in Asia. President Yoon Suk-Yeol said that Tesla plans to buy over $10 billion worth of components from the country in 2023, adding that the two are working to expand supply chain cooperation.
“If Tesla, SpaceX or other companies are considering more investment in (South) Korea, including constructing a Gigafactory, the government will do our best to support the investment,” President Yoon said in a statement to Reuters, following a meeting with Elon Musk. “We are preparing a tailored approach to grant some advantages to these specified companies.”
LG should remain a crucial supplier for Tesla in the years to come, and South Korea is one of many countries requesting investments from the automaker. As Tesla has highlighted in the past, volume production of the 4680 battery cell is set to reduce costs and increase efficiency in its cars, and LG’s shift to developing these at large is a major piece of the puzzle.