November 23, 2020 11:31
LG Chem has been chosen as the sole supplier of rechargeable batteries for Tesla's Model Y set to be made in China from next year.
Industry insiders on Friday said LG Chem and Tesla signed the contract recently.
The Y is a SUV with cylindrical batteries that LG Chem manufactures in Nanjing, China. Industry watchers believe the deal to be worth W3 trillion a year (US$1=W1,117). LG Chem's plant already supplies batteries for Tesla's Model 3 sedan.
Industry watchers had expected LG Chem to be just one supplier among several such as CATL of China and Japan's Panasonic. But Tesla apparently decided that CATL's lithium iron phosphate batteries are not powerful enough for high-end models.
According to market researcher SNE Research, LG ranks first in the global rechargeable battery market with a share of 24.6 percent, followed by CATL's 23.7 percent and Panasonic's 19.5 percent.
LG Chem's market share in China, the world's largest market for electric vehicles, is expected to rise further with the latest deal. Chinese analysts expect EV sales in China to rise 76 percent in 2021 to 880,000 cars, while Model Y sales are estimated at 360,000.
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