Tesla Gets Boost From Korean Battery Maker

Tesla Motors Inc. confirmed Wednesday it has a contract with South Korean battery maker LG Chem Ltd. for upgrades to the company's first car, the Roadster, which has since been discontinued.

Earlier this year, Tesla began offering a $29,000 upgrade to original Roadster customers to replace the battery in the vehicle with a new pack and make other improvements. The new pack bumped up the range to around 400 miles, a 35% increase. Those upgrades are continuing today.

Tesla confirmed the contract with the battery maker after Japanese news agency Nihon Keisai Shimbun reported that Tesla officials were negotiating with LG on a battery contract. LG Chem is a battery-making affiliate of LG Electronics Inc. Tesla declined to comment on any current negotiation with the company.

Until this announcement, the only known supplier to Tesla for batteries was Japan's Panasonic Corp., which is codeveloping a $5 billion battery factory outside of Reno, Nev. Panasonic supplies the cells to the Model S sedan and Model X sport-utility vehicle, which just launched production.

Because of that supply agreement, Panasonic is the largest lithium-ion battery producer for electric cars. But LG has been gaining traction.

LG Chem has earned a reputation among car makers for its high-quality materials that have led to long-lasting batteries. LG is supplying batteries to General Motors Co. for its Chevrolet Volt plug-in hybrid, as well as a fully electric car called the Chevrolet Bolt, which is expected to have a 200-mile range and cost $30,000, roughly twice the range of Nissan's Leaf electric car, which starts at $28,600.

LG also has deals with Ford Motor Co., Audi AG and Renault SA. Nissan-Renault Chief Executive Carlos Ghosn has said he believes LG has the best cell available and is evaluating whether to use the battery in forthcoming Nissan electric cars.

Write to Mike Ramsey at michael.ramsey@wsj.com

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(END) Dow Jones Newswires

October 28, 2015 01:55 ET (05:55 GMT)

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