Tesla said to be in talks to use CATL’s cobalt-free batteries in China-made cars
- That move would mark the first time for Tesla to adopt so-called lithium iron phosphate batteries on its electric cars
- Chief executive Elon Musk promised in 2018 to cut Tesla’s use of cobalt to ‘almost nothing’
Tesla is in advanced talks to use batteries from Contemporary Amperex Technology Co Ltd (CATL) that contain no cobalt – one of the most expensive metals in electric vehicle (EV) batteries – in cars built at its China plant, people familiar with the matter said.
That move would mark the first time for Tesla to include so-called lithium iron phosphate (LFP) batteries in its line-up, as the US electric carmaker seeks to lower production costs amid faltering overall EV sales in China.
Tesla has been talking to the Chinese manufacturer for more than a year to supply LFP batteries that will be cheaper than its existing batteries by a “double-digit per cent”, said a person directly involved in the matter, who was not authorised to speak with media and so declined to be identified.
Tesla and CATL declined to comment.
EV manufacturers typically use nickel-cobalt-aluminium (NCA) or nickel-manganese-cobalt (NMC) batteries on passenger cars because of their higher energy density, which is critical in determining how far these vehicles can drive on a single charge.
To boost the density and safety of its LFP batteries, CATL has been working on its so-called cell-to-pack technology, the people told Reuters.
It was not clear to what extent Tesla intends to use LFP batteries, but the carmaker has no plans to stop using its current NCA batteries, said one of the people.
Tesla has been ramping up production of its Model 3 cars at its newly built, US$2 billion plant in Shanghai, and cutting prices to win market share from conventional premium carmakers such as Germany’s BMW and Daimler.
Tesla offers free charging in China amid coronavirus outbreak
Tesla started to deliver EVs from its Shanghai Gigafactory in December, helping the company save on shipping costs and tariffs for imported models. It is currently seeking regulatory approval to make longer-range Model 3 cars at the plant.
Sales in China of new energy vehicles – referring to battery-only, plug-in hybrid and fuel-cell vehicles – likely sank 54.4 per cent in January, industry data showed, because of the Lunar New Year holiday that started earlier this year and the impact of the coronavirus outbreak on the domestic economy.
The use of LFP batteries will also help Tesla chief executive Elon Musk meet a 2018 promise that the company would cut the use of cobalt – which costs some US$33,500 a tonne – to “almost nothing”.
Tesla plans to host an event, expected to be in April, to share its future battery strategy and technology, Musk said at an earnings conference in January.
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