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Tesla talking to LG Chem, other suppliers, for more batteries

Tesla might be interested in more battery suppliers as it gets ready for production of the Model 3.

Tesla Model 3
Tesla Model 3 / Image Credit: Sebastian Blanco / Autoblog
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It's a twist on the old adage. Tesla Motors may be looking to keep its friends close, and its friend's enemies closer. The California-based electric vehicle maker recently increased its production estimates in the wake of big reservation numbers for the Model 3. To go along with that, the company could increase its sources of lithium-ion battery cells beyond longtime partner Panasonic.

Tesla is in discussions with LG Chem, Samsung, and SK Innovation for possibly producing lithium-ion battery cells for its lower-priced model, according to both Green Car Reports and Teslarati. LG Chem may be in the lead due to lower pricing and increased likelihood of an on-time delivery to Tesla's Gigafactory in Nevada. LG Chem, which has worked with General Motors on supplying battery cells for the Chevrolet Volt extended-range plug-in, also has some history with Tesla. The South Korea-based company worked with Tesla on upgrading the batteries in the Tesla Roadster.

As for Panasonic, that company first reached an agreement to make batteries for Tesla at the Gigafactory in 2014 and last year agreed to invest about $500 million in the Gigafactory. Additionally, as of last month, Tesla was said to be taking bids from mining companies Pure Energy Minerals Limited and Bacanora Minerals Ltd. for the Gigafactory's lithium supply.

The good news for all these companies is that there may be enough business to go around: Tesla, which had previously said it was looking to produce a half-million cars a year by the end of the decade, recently bumped that timeframe up by two years. The company says it's taken 373,000 reservations for the Model 3 since opening up the proverbial phone lines in late March.

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