LG Innotek and Samsung are competing for orders of Tesla camera modules

Key Highlights

• According to recent claims from South Korean news agencies, companies such as LG Innotek and Samsung Electro-Mechanics are vying for a supply contract for Tesla cameras.
• According to industry sources, the aspirational firms are now engaged in a bidding process for Tesla's camera modules.
• The bidding process is expected to conclude in Q1 2022.Samsung Electro-Mechanics and other camera manufacturers from nations such as Taiwan may represent a significant opportunity for companies such as Samsung Electro-Mechanics.
• Interestingly, the South Korean technology newspaper also mentioned that Tesla might produce 1.5–2 million cars this year.

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According to recent claims from South Korean news agencies, companies such as LG Innotek and Samsung Electro-Mechanics are vying for a supply contract for Tesla cameras. According to industry sources, the aspirational firms are now engaged in a bidding process for Tesla's camera modules.

LG Innotek is already a significant supplier of cameras to Tesla, having signed a 1 trillion won ($840 million) contract earlier this month to supply cameras for vehicles such as the Model 3 and Model Y. Tesla, however, has a pressing need to acquire a significant number of cameras in the short term, given that the EV maker is planning to expand its vehicle manufacturing and delivery capacities by 2022.

The latest bidding process reportedly included camera modules for the Tesla Model S sedan, Model X SUV, Model 3 sedan, and Model Y crossover, as well as yet-to-be-released vehicles such as the Cybertruck and Tesla Semi. With Tesla set to bid for at least this year's and next year's production volumes, the total contract value for firms like Samsung Electro-Mechanics may be significant. The bidding process is expected to conclude in Q1 2022.

Samsung Electro-Mechanics and other camera manufacturers from nations such as Taiwan may represent a significant opportunity for companies such as Samsung Electro-Mechanics. Until last year, Tesla's camera module supply was estimated to be between 60% and 70% LG Innotek and 30% to 40% Samsung Electro-Mechanics, depending on the quantity and pricing of the camera modules. According to industry observers, Samsung Electro-Mechanics' share might climb to 50% depending on the outcome of the bidding process.

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Interestingly, the South Korean technology newspaper also mentioned that Tesla might produce 1.5–2 million cars this year. This estimate is pretty consistent with some of Tesla's most fervent bulls' current predictions. According to analyst Pierre Ferragu, a 1.5–2 million car delivery forecast for 2022 corresponds to New Street Research's expectation of > 1.6 million vehicles delivered this year.

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