- Tesla will now source batteries going into Model 3 vehicles from LG Chem industries in South Korea.
- With escalating demand, Tesla has asked all its suppliers to up production and is also looking for more battery suppliers.
- Tesla’s shares rose to circa $1,120 per share and at that price, its market cap topped $210 b.
While the Coronavirus pandemic has most business magnates worried about revenue, Elon Musk has various reasons to celebrate. Apart from sending two astronauts to space through the SpaceX Dragon mission, Tesla reported beating vehicle deliveries for April to June period.
The increase in demand inevitably means the need for ramping up supplies and production. Hearing from an anonymous source connected to the firm, Reuters reported that the auto company will now source batteries from LG Chem’s factories based in South Korea. This move is propelled by the rising demand for its products namely Model 3 and Model Y.
While the company already sourced its batteries from LG Chem, the cells going into Model 3 vehicles were being built at Gigafactory Shanghai. Now Tesla has secured cell supply from LG Chem’s domestic production capacity in Korea.
In the past, Panasonic was Tesla’s sole supplier of battery cells. “Tesla is asking not only LG Chem but other suppliers to increase supplies, as its cars are selling well,” the media outlet’s source stated.
So far, both Tesla and LG Chem have declined to comment on the reports.
It was in January this year that Tesla entered a partnership with LG Chem and China’s CATL for battery supplies used in its electric cars. In the quarterly report, Tesla had revealed that it planned to install added capacities for its Model 3 and Model Y in the Gigafactory 3.
Rising revenues despite global pandemic
Tesla has witnessed an upward graph with respect to profits despite the adverse effects caused by the coronavirus
After Tesla released its Q2 2020 vehicle production and delivery report its shares rose by 26%, topping $1,000, $1,100, and $1,200, therefore, making it worth more than various blue-chip firms, as reported by CNN. Up until now, its shares have surged by 189% this year.
Tesla’s stock has continued to climb after a hike in sales for its Model S and X vehicles along with the 3 and Y models.
Looking at its trajectory, it won’t come as a surprise if Tesla will need to secure more contracts such as this one to drum up its cell supply.