Seoul-based LG Chem is planning to start manufacturing batteries for Tesla at a domestic plant, according to Reuters. This decision comes after the automaker is ramping up production to cope with demand, with Tesla recently announcing that it shipped 90,650 vehicles during the last quarter, exceeding analysts' expectations.
Despite factory closures and a trend of plummeting sales in the wider auto industry due to coronavirus-related lockdowns, Tesla cars are "selling well." Therefore, the company is asking its suppliers, including LG Chem, to increase supplies. LG Chem, which already makes batteries for Tesla at its Nanjing, China factory, is converting some of its production in South Korea to do the same.
Recently, documents obtained from the city government revealed that the automaker plans to manufacture a battery research and manufacturing facility in Fremont, California. Currently, Tesla produces batteries in partnership with Panasonic at the Nevada Gigafactory, and it also has battery contracts with LG Chem and Contemporary Amperex Technology.
LG Chem shares, which have surged roughly 60% so far during this year, rose 2.6% on Friday, whilst the wider market's shares have slumped 2% in 2020.