Tesla has requested permission from the Chinese government to manufacture cars equipped with lithium iron phosphate (LFP) batteries, a document on the website of the Ministry of Industry and Information Technology has shown.
It is still unconfirmed who the battery manufacturer is. However, talks between Chinese battery maker CATL and Tesla have been previously reported on. CATL’s LFP batteries that have been under discussion do not contain cobalt, a material that is notorious for the way it is sourced, and for it being the most expensive component in retail EV batteries.
If Tesla does start producing Model 3s in China with CATL’s LFP batteries, we can expect a premium EV with a lower price tag. Tesla’s Chief Executive Elon Musk has been persistent about his efforts to reduce and eventually eliminate cobalt from Tesla manufacturing.
Importantly, going cobalt-free will reduce the price of Tesla's vehicles in the world’s largest car market, China. It would also significantly increase Tesla’s profit margin. CATL’s LFP batteries would also mean Tesla’s Giga 3 Shanghai factory would produce module-free battery packs by replacing cylindrical cells with prismatic ones.
According to Reuters, CATL’s LFP battery packs will cost $80/kWh, which is under the amount industry analysts say will bring electric vehicle prices on par with petrol and diesel vehicles. General Motors has also eyed manufacturing changes that would lower its electric vehicle prices and increase their longevity.
Cheaper EV batteries are the most important step towards bringing a new era of sustainable driving to the global market, and the only way to get there may be by going cobalt-free. With each new model, Tesla has reduced the amount of cobalt in its cars. The 2009 Roadster had around 11kg of the metal, whereas the 2018 models only have around 4.5kg. It looks like Tesla now wants to set the cobalt-free standard in the Chinese market.