Tesla switches to LFP batteries in all standard range cars

Texas News Today

Close-up of the Tesla logo on the charger of electric vehicle company Tesla Motors’ Supercharged fast battery charging station on August 24, 2016 in the Silicon Valley city of Mountain View, California.

Smith Collection / Gado | photo collection | Getty Images

Tesla has changed the battery chemistry used in all standard range electric vehicles to a version with a lithium iron phosphate (LFP) cathode, the automaker said Wednesday in the third quarter. The investor said in the deck.

The move is likely a way for Tesla to fully increase the profit margins of electric vehicles, but it won’t necessarily increase the price of the vehicle. In the past, Tesla has been criticized for sporadic vehicle price changes.

The company is already manufacturing vehicles with LFP chemistry at its Shanghai plant. These cars are sold in China, Asia Pacific and Europe.

According to materials researcher and consultant Roskil, China generally promotes the use of this type of battery. The company says that about 95% of its LFP cathode production is produced in China.

In September, Tesla told US Model 3 reservation holders a battery made from LFP cells instead of the nickel-cobalt aluminum oxide (NCA) cells that Tesla had previously used on Model 3 sedans sold in North America. I asked if I would accept the equipped car. ..

Sam Abuelsamid, Principal Analyst at Guidehouse Insights, said: “It’s significantly cheaper, doesn’t require nickel or cobalt, and is more stable and safer.”

One major drawback: cells have a low energy density, which means they weigh about the same as other cells and have a smaller radius. Cold weather also affects them more, Abu Elsamide said.

Abuelsamid believes Tesla’s changes are “probably a wise idea and likely to boost revenue, as they probably won’t be cheap.”

According to Abuelsamid, other automakers such as Ford Motor Company and Volkswagen are interested in low-cost model battery chemistry. He also said it was particularly attractive to commercial vehicles such as delivery vans, which do not require hundreds of miles of range.

Taylor Organ, CEO of Tesla’s longtime bull Snow Bull Capital, told CNBC: Second, these batteries are very easy to recycle and these raw materials are ethically easy to purchase. So iron based batteries are already Chinese batteries and you have everything you need in the standard range. car. “

The two major manufacturers of this type of battery cell are CATL and BYD. Tesla is already buying batteries from CATL, which was disclosed by both the companies.

Tesla did not provide additional details on the decisions other than the investor deck, which said it was “moving to lithium iron phosphate (LFP) battery chemistry globally.”

Tesla did not immediately respond to comments.

-CNBC lola korodny contributed to this report.

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