Tesla will use batteries made by LG Chem for its upcoming Model Y that will begin production in the first quarter of 2021 at its Shanghai Gigafactory.
It is the second supply deal for LG Chem __ it has supplied its batteries for Model 3.
The South Korean battery maker will supply 21700 NCM batteries. CATL has been excluded as a supply __ the Chinese company produces LFP batteries for Model 3.
LG Chem was likely chosen first for Model Y, an electric SUV, as it is a bigger car compared to Model 3.
Model Y weighs 2 tonnes while Model 3 weighs between 1.6 tonnes to 1.8 tonnes. Being over 200kg heavier means travel distance per charge becomes more important.
Model Y doesn’t have a “standard” model and comes in just long-range and performance models. For the Model 3, only LG Chem’s batteries was used for long-range and performance variations.
Tesla will likely increase CATL supply for Model 3 produced in China going forward. Export to Europe is increasing and LFP batteries continue to increase in performance and travel distance per charge, which will allow the US car giant to reduce the portion of long-range and performance models it produces for this car model.
Tesla may also shift some of its LG Chem battery supply for the Long Range Model 3 to Model Y instead as SUV are globally popular. This may allow openings for companies such as Samsung SDI and Panasonic to supply batteries for Model 3.