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Tesla in talks with Samsung SDI to supply batteries for Model 3: Reports

New South Korean media reports over the weekend added fuel to speculation that Tesla is in talks with Samsung SDI for the latter to supply batteries for the Model 3 electric car.

A shipment of Samsung SDI battery cells to an Oakland port are destined for Tesla's development facility in California, according to reports that have emerged in South Korea, suggesting the South Korean battery maker could become a supplier for the future Model 3 electric car.

A shipment of 120 tons of Samsung SDI battery cells arrived at a Tesla development facility in April in California, destined for the company's factory in Palo Alto.

The volume of the shipment is large for a pilot project, which suggests that the batteries could be used for a final test before full-scale adoption.

The Samsung SDI 18650 cylindrical battery cells are 18mm in diameter and 65mm in height. About 6,000 of the lithium-ion batteries are wrapped together to form the power plant of a single vehicle.

A Samsung SDI spokesperson declined to confirm the reports or if the company has made a supply deal with the electric car company.

Panasonic is currently Tesla's main supplier and the two companies are developing a $5 billion factory in Nevada in the US. But Tesla inked a deal last year in October with South Korea's LG Chem to supply a small volume of batteries for the Tesla roadster and the California-based electric car company would need millions more batteries to meet expanding demand for its EVs.

Tesla's manufacturing volume passed the 1 million mark in 2015. Some 400,000 people have already submitted preorders for the moderately priced Model 3, and Tesla announced a production target of at least 500,000 units of the Model 3 alone for 2018. The company would need as many as 250 million battery cells to meet demand for the Model 3, so it makes sense for the company to diversify suppliers.

LG Chem's main clients are three North American car makers including General Motors, while Samsung SDI has partnered with European auto makers BMW and Fiat Chrysler as a supplier.

Tesla's Elon Musk last week dropped hints that the Model 3 will be fully autonomous.

Source: ZDNet.co.kr