For political reasons, it would have made no sense for Tesla to choose Panasonic to supply battery cells to Tesla's Shanghai Gigafactory. This has nothing to do with the quality or cost of the cells, but rather the political reality that Panasonic is a Japanese company, and there is and has been a long-running enmity between Japan and China that stretches back centuries. That's almost certainly not going to disappear any time soon.
In fact, it hasn't been that long ago since China temporarily banned sales of cars containing battery cells which were not sourced from China. This affected not only Panasonic cells, but also cells sourced from S. Korea, which includes LG Chem. LG at least now has factories in China making cells, so hopefully that situation won't arise again (knock on wood!)
A big reason why Tesla has been given "most favored" status by the Chinese Communist central government is Elon Musk's personal friendship with Chinese Premier Li Keqiang. That's how Tesla became the first foreign auto maker to be given permission to build an auto assembly plant in China that's not majority co-owned by a Chinese company. Elon Musk is wise not to choose Panasonic, or any other Japanese company, as a main supplier for Tesla cars made in China. Not if he wants Tesla to keep its "most favored company" status! Picking Panasonic or some other Japanese supplier for a critical parts of Tesla cars, such as the Panasonic cells made at Tesla's Gigafactory 1 in Nevada, would be a good way to upset the Chinese, and would likely be seen by them as a slap in the face. It would be rather foolish of Tesla to "upset the apple cart" like that.
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Now, can LG Chem make battery cells as good for Tesla's cars as Panasonic? I don't know... and neither does anyone else posting here. Major battery cell makers, including Panasonic, LG Chem, and Samsung, are fiercely competitive. Maybe Panasonic's cell chemistry is slightly better for Tesla's purposes, or maybe back in the day, Tesla chose Panasonic simply because they gave them a better price per kWh for their cells. I don't know... and again, neither does anyone else posting comments here. Auto makers and cell makers keep details about their cells and their prices as proprietary info; as trade secrets.
But let's assume, for the sake of argument, that LG Chem will make NCA cells for Tesla; cells which can't quite match the performance of Panasonic's cells, and/or that they are slightly higher per kWh in price. After all, LG's innovation in lithium-ion batteries has been with the lower energy density NMC chemistry, not the higher energy density NCA chemistry that Panasonic uses in the cells made for Tesla. So it's plausible that LG Chem, in making NCA cells for Tesla, won't be able to quite match the performance of Panasonic's cells.
However, Tesla has said that at least for the near future, the Shanghai Gigafactory will make only the Standard Range trim levels of the Model 3 and the forthcoming Model Y. Those cars will have extra room inside the battery packs, which were designed to hold a Long Range battery pack with more cells. Even if LG's cells have a lower energy density, Tesla can simply increase the number of cells per pack to make up for the lower energy density. Also, even if LG Chem's price per kWh is slightly higher, the prices for locally sourced batteries would be less expensive than importing cells from Tesla's Gigafactory 1 in Nevada, due to shipping costs alone. Batteries are heavy! And possibly an even bigger advantage in lower prices comes with avoiding any tariffs on imported battery cells, which Tesla would have to pay if it imported cells from Gigafactory 1 in Nevada. I think most readers here are aware of the current state of escalating trade war between the U.S. and China; obviously Tesla wants to avoid that as much as possible! In fact, the trade war was likely the biggest motivation for Tesla building the Shanghai Gigafactory before a European Gigafactory, and the motive for making sure construction proceeded as fast as humanly possible.
Furthermore, given that energy density in li-ion cells keeps incrementally advancing year on year, it's reasonable to assume that LG Chem should be able to match, within a year or two, what Panasonic had achieved back when the Model 3 was new, in 2017. That is, if they haven't done so already. Given how fiercely competitive these companies are, it wouldn't surprise me if LG Chem's 2019 NCA chemistry can match Panasonic's 2017 NCA chemistry. Likely Panasonic is still the leader in NCA chemistry; we know that the newer, "Raven" versions of the Model S and Model Y have cells with improved energy density. I rather doubt LG Chem can match that... but it doesn't need to. Using two-plus year old chemistry will be perfectly fine for Tesla Model 3's (and eventually Model Y's) made in China; that still puts Tesla far ahead of other auto makers in EV tech. Tesla doesn't have any near-term plans for making the Model S or Model X in China.
So, is Tesla choosing LG Chem over Panasonic to supply the Shanghai Gigafactory an indication that there is no truth to the claim that Panasonic's cell chemistry is superior for Tesla's purposes? That is, for the type of high energy density cells that Tesla uses in its cars? Well, of course not! That's just one more bit of bull pucky, just another case of twisting truth into falsehoods, from our resident Tesla basher, Mr. "Green".
