LG Energy Solutions wants to be building battery cells for Tesla in 2023 through a newly-created factory in the U.S. or Europe.

The South Korean company already supplies its batteries to Tesla for the Chinese market but is keen to expand beyond this one market. LG recently told Korean reporters that it wants to build a U.S. factory to produce battery cells for EVs and energy storage systems with hopes that Tesla will be among its customers.

In September 2020, Elon Musk unveiled the new 4680 large-format cylindrical cells that the electric car manufacturer intends to use in its future models. The automaker wants to manufacture these cells at plants in Texas and Germany as it looks to reduce production costs, improve battery performance and increase driving range.

Tesla’s 4680 battery cell

LG has started to make its own samples of the 4680 cells but does face technological hurdles and challenges in scaling up production. The Korean company has not yet secured a supply contract with Tesla to make the 4680 cells but Musk did recently confirm Tesla is in talks with battery suppliers to develop the new batteries.

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“LG plans to produce 4680 cells at its new U.S. factory. They plan to build a new 4680 cell line to supply Tesla’s Giga Berlin in Europe,” a source told Reuters.

Panasonic, another battery supplier of Tesla, also plans to start a test line for 4680 cells in Japan later this year.

Not only does LG currently supply Tesla with its batteries in China but it also has a $2.3 billion joint venture with General Motors in Lordstown, Ohio to take pouch-type electric vehicle batteries at a new plant. GM and LG are also said to be considering establishing a second battery factory in the U.S.