By Michael Elkins
An exclusive story by Reuters on Friday reports that electric vehicle giant, Tesla (NASDAQ:TSLA) is recruiting Chinese and Korean materials suppliers to help lower cost and boost the energy of its newest battery cells, according to people familiar with the plans.
According to the sources, who asked not to be named, Tesla has tapped China's Ningbo Ronbay New Energy (SS:688005) and Suzhou Dongshan Precision Manufacturing (SZ:002384) to help lower materials costs as it ramps up production of 4680 battery cells in the U.S.
If Tesla can work out the performance and process kinks and meet its production targets, the 4680 ultimately could be the linchpin in CEO Elon Musk's dream of building 20 million vehicles annually by 2030.
As part of its efforts, Tesla has also signed an agreement with Korea's L&F Co to supply high-nickel cathodes that could increase the energy density of its 4680 cells, one of the sources said.
The EV maker aims to enhance its own output with 4680 cells from Korea's LG Energy Solution (KS:373220) and Japan's Panasonic Corp (TYO:6752) - an insurance policy to secure future EV production, two of the sources said. LG and Panasonic are expected to supply cells for Cybertruck, one of the sources said.
Shares of TSLA are up 1.63% in mid-day trading on Friday.