Outsourcing Korean Products
According to industry sources, Tesla is currently having talks with various South Korean companies in order to procure auto parts.
Recently, the company decided to use Hankook Tire products in the Model 3. Hankook Tire is planning to produce and supply tires only for the Model 3 that minimize battery power consumption. Likewise, Mando is to supply Tesla with steering racks and electronic power steering systems. The two companies are working together on a self-driving system, too.
SK Lubricants has signed a contract with Tesla to supply gearbox oil for the Model 3 and the Model S. MS Autotech is slated to supply molds for hot stamping parts production. Motor cores and non-oriented electrical sheets are expected to be supplied by a South Korean company as well.
In the meantime, the Korea Institute for Industrial Economics & Trade said on August 29 that the Model 3 is likely to trigger competition in the South Korean electric vehicle (EV) market. “Still, South Korea’s EV technology is at least two years behind Tesla’s,” it added, continuing, “The South Korean government has concentrated on EV technology since 2009 and the country currently has the most advanced EV battery technology in the world, but the low EV sales volume in the domestic market is hindering the creation of a sizeable EV ecosystem in the country.”