LG Energy Solutions, the electric vehicle battery business spun off from LG Chem, has embarked on making EV batteries from four different materials, and Tesla, Inc. TSLA is likely to be a customer.
What Happened: LG Energy Solutions is planning to commence manufacturing of batteries consisting of anodes made of nickel, cobalt, manganese and aluminum — or NCMA — local news daily Korea Times reported.
Nickel would make up about 90% of the battery and cobalt would be below 5%, the report said.
Manufacturing of these batteries is scheduled to start in the second half of 2021.
The NCMA batteries would be supplied to Tesla for its Model Y vehicles, the report said, citing industry sources.
Related Link: Tesla And The S&P 500: Expected Moves And Spread Trading
LG Energy Solutions is increasing production capacity at its plant in Nanjing, China, which manufactures cylindrical battery cells used in Tesla's vehicles, Korean Times said.
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Why It's Important: As competition heats up in the EV industry, companies are vying to increase range, which is the distance an EV can travel on a single charge.
The high nickel percentage, according to the report, increases energy density, helping EVs travel as much as 600km on a single charge, as opposed to the current range of 500km.
Battery cost comprises of roughly 40%-50% of the cost of an EV. The addition of aluminum is expected to bring down the battery costs due to the reduced use of cobalt.
Tesla shares were up 2.16% at $636.22 at last check Thursday.
Related Link: Tesla Supplier LG Chem Recalls Home Battery Systems In US Due To Fire Hazard
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