As demand for Tesla's vehicles and other products grow, the automaker needs more batteries. This should not come as much of a surprise, as Tesla continues to deliver more cars than Wall Street analysts predict.
Batteries have been one of the limiting factors in scaling up production of the company's cars and home Powerwalls.
What Happened: A new report from Reuters says Tesla is now ready to grow its battery production capacity in South Korea thanks to help from LG Chem.
In the United States, Tesla has produced all of its own batteries in collaboration with its partner Panasonic.
LG Chem has traditionally been the battery supplier for all other electric vehicles in the United States.
Why It's Important: This is not the first time Tesla has needed help producing more batteries - in China, Tesla gets its battery supply with the help of CATL.
This could also have a secondary positive effect for Tesla. Batteries are limited worldwide as demands grows. If Tesla can outbid competitors and secure battery supply, it may leave other entrants into the EV field with the big problem of supply — with no where to turn when Tesla is claiming most of the world's batteries.
Benzinga's Take: This is great news for Tesla. A problem of high demand and not enough supply is a great one to have.
If the company can figure out how to source these batteries, they can continue selling more cars and growing their market share.
Tesla is set to reveal their million-mile battery Sept. 15 that uses a new technology and new manufacturing process. This may allow Tesla to grow its battery supply even more, and sell more vehicles.
Photo courtesy of Tesla.
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