Have you ever wondered who supplies Tesla batteries? What companies are now leading when it comes down to providing Tesla batteries?
Well, there are three official companies that provide Tesla with EV batteries. Most batteries are lithium-ion based and all three companies are Asian battery manufacturing companies. Panasonic was the first company to ever get tied to Tesla officially. They provide batteries for all four Tesla models.
The other two companies are LG Energy Solution and CATL. CATL joined in late 2020. Both LG Energy Solution and CATL only have 20% and 10% respectively in terms of cell providing volume. As Tesla cars run on electricity, it’s inevitable for them not to get tied with more cell providing companies. That’s why more companies are interested to join Tesla.
Who is supplying batteries to Tesla?
Tesla has become the first vehicle manufacturer ever to produce an electric car. As Tesla cars run on only electricity, they require batteries to generate power for the vehicle.
You’ve already known from the title or the introduction that there are three companies that can be called top guns that supply batteries to Tesla. At least they are the largest and the official providers till now.
Those companies are LG Energy Solution of LG Chem, NCA chemistry’s Panasonic, and finally LFP chemistry’s CATL, which is short for Contemporary Amperex Technology Co., Limited.
The Panasonic and the CATL joined After LG Energy Solution in 2020 in order to supply batteries for the Tesla Model 3 and Model Y, which are made in China.
Now, let’s see how these three companies contribute to supplying batteries to Tesla Motors vehicles.
LG Energy Solution of LG Chem
LG Chem’s LG Energy Solution company is a South Korean supplier that is also considered the biggest lithium-ion cell provider for passenger xEVs internationally with almost 38 GWh deployed in vehicles sold in 2020.
LG Energy Solution’s volume is still growing, and their market existence is being specialized globally, meaning they have a specific market for a specific region. Also, they have a huge number of customers and their battery-providing business is blooming with profits.
Not to mention, they were the second official battery provider for Tesla. They have a huge impact on Tesla on battery sales. And Tesla constitutes almost 20% of LG Chem’s LG Energy Solution’s xEV cell sales. Still, that is well enough to regard that the MIC Model 3 is the biggest project for the LG company.
Contemporary Amperex Technology Co., Limited
CATL is a Chinese technology-based company that has been more diversified when it comes to the number of cars or customers. Although they are mostly focused on China right now.
The MIC Model 3 with CATL cells was released in 2020 late November. As it joined later than the LG Energy Solution, it has only 10% of the volume.
Still, when 10% of the CATL’s EV battery got deployed on the roads, it made out as the third largest cell supplier’s vehicle in the market for that calendar year. Deliveries of the MIC Model 3 batteries started in Q4 only by CATL.
The company that Tesla entrusted with the batteries first was Panasonic. It has been Tesla’s lithium-ion battery supplier for all four models for a very long time. CATL and LG Energy Solution joined the game after Panasonic.
It’s a Japanese company that is still Tesla’s most trusted and important cell provider and partner. It’s the most prominent provider when it comes to volume, and it’s also a manufacturing associate at the Tesla Gigafactory located in Nevada.
It has proper domination over EV batteries. Tesla is responsible for purchasing about 90% of Panasonic’s entire EV battery supply.
Panasonic sells their EV batteries at profit, but they also have a high dependence on a single consumer and buy a particular cell format (18650 or 2170). Although they aren’t used much by most of the other consumers and that sounds dangerous from the business perspective.
Tesla’s influence on their battery suppliers
According to Adamas Intelligence, Tesla had a great influence on the EV battery market for the 2020 calendar year. Especially on the top three companies that officially provide them with batteries.
Tesla is the largest company when it comes to passenger xEV, which also includes BEVs, HEVs, PHEVs battery deployment, capacity, and battery materials. And Tesla is already larger than a lot of electric vehicle manufacturers like Waymo, Volta Charging, Ford, Rivian, NIO, etc.
Due to its influence on the EV battery market, the BYD company is also interested in joining them. Not to mention, BYD is also a Chinese company, which adds another battery provider for Tesla.
As Tesla has become the largest electric car manufacturer in the world, they need trustable partners who can provide them with batteries. Three companies are already onto it and other companies like BYD are interested in joining them.
In the near future, we might see some other battery manufacturers get involved with Tesla, until now, it’s these three Asian companies that are dominating the market for Tesla.