Tesla To Source Nickel-Heavy NCMA Batteries From LG Chem Starting In 2021: Report

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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