LG Innotek, Tesla sign a $746M deal for supply of camera modules

LG Innotek Co., the electronic materials and component manufacturing arm of the LG Group, has struck a deal with Elon Musk’s Tesla company for the supply of camera modules. Sources said that the deal is worth $746 million or KRW1 trillion.

According to Pulse News, LG Innotek has been in talks with Tesla Inc. for a while now and has finally sealed the deal recently. Under the agreement, the South Korean company will be delivering automotive parts to Tesla and based on the reports, the items include camera modules of Tesla’s Model Y, Model 3, Semi, and Cybertruck that has yet to be shipped out to Europe and North America.

This is not the first deal between LG Innotek and Tesla. In fact, just last year, the former supplied some automotive cameras to the latter, but this was in small quantity only. The Korean firm was also registered as an official parts supplier of Tesla even before it won the major deal. The EV company recognizes LG’s high-quality products thus, it was named the official supplier.

In any case, it was reported that LG Innotek has been dedicating more time to its automotive camera module business because these are high-value-added products these days. It was noted that these types of camera modules designed for vehicles are two to three times more expensive compared to the ones being used on mobile phones. This is because automotive cameras require more complex technology.

LG Innotek will be delivering the camera modules to Tesla’s new production plant in Austin, Texas. This is the same facility that has been labeled a Gigafactory and only started operating early this year.

“The company is in discussions with the client, but details are not yet decided,” Korea Joongang Daily quoted LG Innotek as saying in a statement regarding the reported agreement with Tesla. “LG Innotek will make a more specific announcement in one month or when details are decided.”

Meanwhile, experts in the field said that the automotive camera module market has been growing due to the acceleration in the development of autonomous vehicles. They further noted that this industry is expected to expand further and may reach an annual average of 15.7% in the next five years.