July 29, 2020 / 4:41 AM / 12 days ago

Tesla's Musk says open to supplying batteries to other automakers

SEOUL (Reuters) - Tesla Inc (TSLA.O) Chief Executive Officer Elon Musk said on Tuesday that the company is open to licensing software and supplying powertrains and batteries.

FILE PHOTO: Tesla CEO Elon Musk attends the Tesla Shanghai Gigafactory groundbreaking ceremony in Shanghai, China January 7, 2019. REUTERS/Aly Song/File Photo

Tesla has previously supplied batteries to Mercedes and Toyota Motor (7203.T) under separate partnership deals. Battery manufacturing is an area that analysts and industry officials say the U.S. electric car maker has a competitive edge compared with legacy automakers.

“Tesla is open to licensing software and supplying powertrains & batteries. We’re just trying to accelerate sustainable energy, not crush competitors!” Musk said in message on Twitter.

It was unclear which types of batteries it will supply. Tesla currently runs a battery joint venture with Panasonic Corp (6752.T) and also sources batteries from China’s Contemporary Amperex Technology (CATL) (300750.SZ) and South Korea’s LG Chem (051910.KS).

Tesla is also planning to build its own battery manufacturing facility at its Fremont, California, plant under its “roadrunner” project.

Batteries are the most expensive and important component of electric vehicles (EV).

“The supply could lower the entry barriers for startup EV makers, posing a potential threat to legacy automakers, which have their own platforms,” said Park Chul-wan, a South Korean battery expert and a professor at Seojeong University.

“The strategy, if successful, will increase the EV market’s dependence on Tesla,” he said.

Musk said in a recent earnings conference call that the real limitation to Tesla’s growth is battery cell production at an affordable price, and said the company would expand its business with Panasonic, CATL and LG Chem.

In 2014, Musk also said Tesla would allow others to use its patents in hopes of speeding up development of electric cars by all manufacturers.

Reporting by Hyunjoo Jin; Editing by Christian Schmollinger

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