LG Energy Solution Ltd. announced Monday it will invest 580 billion won ($451 million) to manufacture battery cells for Austin-based Tesla, Inc.
The battery-making arm of LG Corp. plans to add 9 gigawatt-hours (GWh) worth of production capacity for the new 4680 cylindrical batteries at its No. 2 Ochang factory.
The battery maker also announced it would invest 150 billion won in the No. 1 Ochang factory to add 4 GWh worth of production capacity to manufacture the existing 2170 cylindrical battery cells.
The 4680, expected to be mass-produced next year, is composed of nickel, cobalt, manganese, and aluminum (NCMA). The new battery has an increased nickel composition of up to 95 percent and added aluminum.
If and when LG Energy Solution succeeds in mass-producing the new cell on schedule—widely considered to be the battery industry’s game-changer—it will become the world’s first company to manufacture them at a large scale.
Experts say the latest injection of funds will cement the already strong ties between the South Korean conglomerate and Elon Musk’s Tesla.