Tesla will acquire a 10% stake in LG Energy Solution, according to electrek. LG Chem has been exploring how to separate the battery business from other operations and make it a public-listed entity. Tesla has held a long-running battery cell supply with Panasonic but is expanding the supply chain.

  • Tesla will have its battery cell production but would continue buying battery cells in the foreseeable future from suppliers
  • Korean Times report surprising but makes sense as Tesla has been looking for ways to cut costs and producing round batteries-anonymous
  • It is unusual for Tesla to purchase a minority stake in a company and in previous acquisitions, has sought control, including acquiring entire firms-Electrek
  • Tesla not opposed to acquisitions, but a 10% stake in LG’s battery business more expensive than the SolarCity acquisition.
  • Tesla has strong cash position and could acquire through shares, but it would be a big move for the company.
  • LG is tied to other automakers, including GM, and Tesla unlikely to be welcome.

Tesla stock strengthening on the unconfirmed reports of acquisition in LG’s battery business. TSLA: NASDAQ  is up 3.67%, LG: KRX is down 1.29%.