Fresh off the hype and Tesla is reportedly looking to make a massive move to secure the energy that powers its electric cars. The automaker is looking into purchasing a stake in battery maker LG, the Korea Times reported on Monday.,
The Korean technology giant builds batteries under its LG Chem division, though it announced earlier this month it will spin off its battery business to create a new company, LG Energy Solutions. The company did not immediately return Roadshow’s request for comment on the potential Tesla stake. The carmaker is reportedly interested in as much as a 10% stake in the newly created division, which would help it secure a supply of batteries with little risk for the foreseeable future. Tesla also did not immediately return a request for comment.
The outlet, citing sources familiar with the talks, said it’s not clear if Tesla’s end game is an all-out acquisition of LG Energy Solutions, but one source said it “does make sense” as the carmaker continuously looks at ways to cut production costs for its EVs. Last week, CEO Elon Musk said during his Battery Day presentation that cheaper batteries and breakthroughs should allow the automaker to , potentially within the next three years. It’s not the first time Musk made such comments. In fact, he made similar remarks… about three years ago.
Tesla today works with LG and two other suppliers for its vehicle batteries. Its best-known partner is Panasonic, which operates with the automaker at its Gigafactory in Nevada. Panasonic has already said it. In China, Tesla works with , though the report mentions the automaker isn’t quite sold on the Chinese firm’s economies of scale in manufacturing.
Tesla’s potential stake in the LG division could make things interesting as automakers continue to work to secure battery supplies as more and more EVs are launched. General Motors, for example, has worked very closely with LG with its Chevrolet Bolt EV, and it’s even with LG in Ohio.