Tesla is reportedly tapping South Korean battery maker LG Chem as one of its suppliers for Gigafactory 3, which will produce affordable versions of the Model 3 sedan and the Model Y crossover for the local Chinese market. The update was recently related to Bloomberg by individuals familiar with the proceedings.
According to the news agency’s sources, the 2170 cells that Tesla will be acquiring from LG Chem will initially be used for the Model 3, which is expected to enter production within the next few months. LG Chem will reportedly remain a key supplier for Tesla’s Chinese operations, even as the electric car maker starts the production of its Model Y crossover in the Shanghai-based site.
LG Chem’s 2170 battery cells will reportedly be produced at the company’s Nanjing factory, which is located about 200 miles west of Shanghai. This relatively short distance benefits both LG Chem and Tesla, as cells produced from the Nanjing plant could be transported to Gigafactory 3 in a relatively short period of time.
It should be noted that LG Chem will not be the sole battery supplier for Gigafactory 3. According to Bloomberg‘s sources, Tesla is also in talks with Chinese battery maker Contemporary Amperex Technology Co. Ltd (CATL) about a potential supply deal.
So far, LG Chem has declined to issue a comment about the recent reports. Representatives from Tesla China and CATL have declined to provide a statement about Bloomberg‘s recent report as well.
The rapid progress of Gigafactory 3’s buildout has exceeded expectations, even those of Tesla CEO Elon Musk, who already has a reputation for being very optimistic with his estimates. Musk noted during the facility’s groundbreaking ceremony last January that Gigafactory 3 will start trial production runs of the Model 3 at the end of December. Recent reports from China have suggested that Musk’s timetable could actually be conservative.
In an interview, Tesla Global Vice President Grace Tao stated that Gigafactory 3 is already mostly complete. Tao noted that the installation of production equipment within the factory is progressing well, and machines are already being debugged in preparation for trial Model 3 production runs. Local reports have also noted that Gigafactory 3’s substation is expected to start powering the complex sometime next month. Barring any unexpected delays, this could result in Gigafactory 3 coming to life as early as the end of September.
Watch a recent flyover of the Gigafactory 3 site in the video below.