Samsung SDI "in talks with Tesla over batteries"

Samsung SDI is making progress in talks with Tesla Motors to supply batteries for the U.S. automaker’s Model 3 electric car as well as its energy storage products, a source with direct knowledge of the matter told Reuters.

Shares in the Samsung SDI surged to trade 6 percent higher in early afternoon trade, beating the wider market’s 1.1 percent gain.

Tesla, which currently procures its batteries from Panasonic Corp., is likely to add Samsung SDI as a supplier should sales exceed expectations, the source said, although he declined to specify what level of sales would clinch a deal for the South Korean company.

Citing “tremendous demand,” Tesla Chief Executive Elon Musk said in April that the automaker planned to boost total vehicle production to 500,000 in 2018 — two years earlier than its original target. Suppliers have said the goal will be difficult to achieve.

Tesla has taken 373,000 orders for its Model 3 — which has a starting price of $35,000, about half its Model S — and has said it would begin customer deliveries in late 2017.

“It remains to be seen whether the orders will translate into actual sales,” the source said.

(REUTERS)