Report: Tesla to buy LG Chem batteries for Shanghai factory

Sources claim LG will be one of several battery suppliers for Tesla's Chinese-market EVs.

Tesla has reportedly signed a battery supply agreement with LG Chem for vehicles built in China.

The automaker's plan to diversify its battery supply arrangements has been the subject of several rumors. Unofficial reports have claimed Panasonic's battery assembly operations at the Nevada Gigafactory caused production hiccups during Model 3 ramp-up, potentially motivating a shift away from overreliance on a single supplier.

Sources have told Bloomberg that the deal is not exclusive to LG Chem and Tesla is planning to use multiple battery suppliers in China. The automaker is rumored to be considering China-based Contemporary Amperex Technology Co, among other candidates.

The suppliers will be tasked with building the '21700' battery cells that are used in the Model 3 and likely the Model Y that is next up on Tesla's roadmap. The company is still bring its Shanghai factory online, with production aiming to begin before the end of the year.

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