Media reported that Tesla was considering ceasing production of 46800 cells due to multiple difficulties.
If the company does so, more orders will be placed for South Korea-based LG Energy Solution, Samsung SDI and SK On. According to Autoevolution, Tesla might stop manufacturing the 4680 cell at its Gigafactory in Texas and rely entirely on suppliers for the battery.
South Korea-based Businesspost reported that Tesla terminating 4680 cell production could be because the EV maker is forming a supply system with partners. If companies like LGES can provide sufficient production capacity, Tesla can concentrate on vehicle manufacturing.
LGES has established 46800 cell production lines at its primary production base in Ochang, South Korea, and aims to begin volume production in August 2024. If Tesla stops making the battery at the end of 2024, its EV production will not be affected.
LGES is constructing a plant in Arizona, the US, to make cylindrical batteries. The facility will have a capacity of 36GWh and is slated to start production in 2026.
Samsung SDI also plans to establish a scheme this year to enable the mass production of cylindrical batteries with a 46mm diameter. The company plans to diversify its product portfolio to supply different batteries to various customers.
Tesla is not the only EV maker adopting the 46 mm cylindrical battery. BMW and US-based Rivian are also potential customers of Samsung SDI. At CES 2024, SK On announced that it will develop a series of cylindrical batteries with a diameter of 46mm.
If South Korean battery manufacturers can increase their influence in the cylindrical battery market and secure Tesla and other customers, they will likely challenge Chinese competitors, who have dominated the sector, with the 46800 battery cell.
On the other hand, Panasonic, Tesla's existing battery supplier, may expand its production capacity for the 46800 battery. It was reported that the Japanese manufacturer was mulling over a US$4 billion investment in Kansas, the US, to build production facilities.
