Tesla Deepens South Korea Supply Chain Ties With Samsung, LG Units

Tesla Inc. is expanding its partnerships with South Korean companies beyond Samsung Electronics Co., deepening cooperation in batteries and automotive electronics. The company is increasingly selecting Korean firms as key partners across its electric-vehicle, energy-storage and humanoid-robot businesses. As US-China tensions persist, Korean companies have become core partners in Tesla’s supply chain, according to industry officials.

As of June 15, Tesla is rapidly broadening supply-chain cooperation across hardware with major electronics and battery affiliates of Samsung and LG, the officials said. The most notable expansion has come in batteries. LG Energy Solution Ltd. signed a contract with Tesla last year to supply prismatic lithium iron phosphate, or LFP, batteries for electric vehicles and has since extended the relationship to energy-storage-system batteries. Samsung SDI Co. is also supplying batteries for Tesla’s energy storage systems, the officials said. As Tesla sharply cuts reliance on Chinese LFP battery makers such as Contemporary Amperex Technology Co. Ltd., or CATL, because of US tariff barriers, Korean suppliers are moving into the gap.

Korean parts makers are also gaining clout in automotive components that are critical to future mobility and robotics. Samsung Electro-Mechanics Co. and LG Innotek Co. have maintained solid ties with Tesla in camera modules that serve as the “eyes” of the carmaker’s Full Self-Driving system. The two companies are expanding supplies beyond electric-vehicle camera modules to include modules for Optimus, Tesla’s humanoid robot under development.

Display makers are also benefiting from Tesla demand. LG Display Co. is supplying high-performance organic light-emitting diode, or OLED, displays for Tesla electric vehicles. Samsung Display Co. is also seeking to enter Tesla’s value chain by pursuing supplies of displays for Optimus.

“The hardware competitiveness of Korean companies has become an essential element in Musk’s broad future roadmap, including autonomous driving and robots,” an industry official said. Having passed strict quality standards, Korean-made batteries and components are likely to be adopted more quickly by other big tech companies as well, the official added.

Kim Chae-yeon, Hankyung.com reporter why29@hankyung.com