Tesla prepares to use cobalt-free batteries

Reuters reports Tesla is in advanced talks with Chinese battery maker Contemporary Amperex Technology (CATL) to use the latter's cobalt-free batteries in future cars. People familiar with the matter told the news agency that Tesla intends to use CATL batteries for cars made at its Chinese plant.

The lithium iron phosphate (LFP) batteries from CATL are significantly cheaper than traditional nickel-cobalt-aluminum (NCA) or nickel-manganese-cobalt (NMC) batteries but they have lower energy density. At the moment, Tesla exclusively uses NCA-based batteries. Adopting LFP batteries would result in cheaper Tesla cars but will result in a lower range. It will be interesting to see how Tesla plays this.

Adoption would mark the first time for the U.S. automaker to include so-called lithium iron phosphate (LFP) batteries in its lineup, as it 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 percent,” said a person directly involved in the matter, who was not authorized to speak with media and so declined to be identified.