Tesla might have a backup plan if it needs more batteries to meet demand

Reuters reports that battery and display component provider Samsung SDI is “making progress” in signing a deal to provide Tesla Motors with batteries for its vehicles and energy storage products. At present, Tesla gets its cells from Panasonic; it’s also in the process of ramping up the Gigafactory near Reno, Nevada (which is a joint venture with Panasonic). A Samsung SDI deal would seemingly be a hedge against battery demand outstripping supply, despite the Gigafactory’s goal of being the single largest battery production facility in the world — and a recent claim by Elon Musk that Tesla could triple the facility’s planned output.

Much of Tesla’s energy lately has been spent discussing and planning its manufacturing processes, as it seems to have been caught off-guard by Model 3 pre-order demand that has now exceeded 400,000 units. (This year, Tesla plans to deliver somewhere between 80,000 and 90,000 vehicles in total, split between the Model S and Model X.) That demand may also be putting pressure on projected battery supply, leading the company to sign a backup battery deal just in case. “It remains to be seen whether the orders will translate into actual sales,” Reuters quotes its source as saying.

Tesla did not respond to a request for comment.