Tesla has a big deal with LG Energy, a big shock to China’s battery industry

American electric car company Tesla has dealing with South Korea’s LG Energy Solution (LGES) of about Rs 35,000 crore. The purpose of this deal is that Tesla now wants to be less dependent on China for essential things like battery. This deal is not only a big step in the field of technology and energy, but also shows that Tesla is making a big change in its planning and strategy.

Now the battery will be made in America?

• Under this deal, LGES will supply LFP (Lithium Iron Phosphate) battery to Tesla from America’s Michigan plant. These batteries will not be used in Tesla in their electric cars, but in the energy storage system (eg PowerWall and Megapack). Earlier Tesla used to import these batteries from China. Now due to supply from America, tax will be saved and supply will also be safe.

Why is LFP battery special?

• LFP batteries are considered special because they are inexpensive, they are long and they are largely safe from risks like overheating or fire. They are mainly used in grid energy storage systems. Tesla uses them for homes and industrial needs in backup power solutions like its powerwall and megapack.

Why is Tesla making distance from China?

This strategy of Tesla has come to light due to the ongoing trade war between the US and China. The US has imposed heavy taxes on the battery components coming from China, which has made imports expensive. For this reason, Tesla is now taking steps towards supplying supply from other countries instead of China.

What is Tesla’s big planning?

• In addition to the battery deal with LGES, Tesla has recently dealled a chip of $ 16.5 billion (1.38 lakh crore) with Samsung Electronics. This shows that Tesla is now removing its suppliers from China and shifting to countries like America and South Korea, making its supply chain more secure and stable.

What will be the effect of this deal on EV industry?

• This deal of Tesla can lead to a big change in the EV industry. This will make Tesla’s supply chain more secure and politically stable. Because the batteries will now be made in America, they will not be charged tax and the cost will also be low. With this deal, companies like LGES will get reliable customers for a long time. This shows that now global companies are looking at other options more seriously instead of China.