Tesla Model 3 will have in its most accessible version, a pack consisting of lithium-ferrophosphate cells (LiFePO4). These batteries would be manufactured by the local company Ninge, which could also access the public aid offered by the Chinese government for the production of this type of cell, and it will substantially reduce the cost of the American sedan battery.
According to the battery and mineral specialist Simon Moores, the main reason for this adjustment is to reduce production costs, a sweeping change that can reduce the production price of the Chinese Model 3 by at least 25%.
Tesla, LFP & Model 3 in China 🇨🇳. @benchmarkmin will publish takeaways tomorrow. Sneak peek here:— Simon Moores (@sdmoores) February 18, 2020
For China only made and domestically sold:
– LFP to be used in Model 3 short range (CATL)
– NCM811 to be used in Model 3 long range (LG Chem)
All about cost. Not about cobalt.
Another factor in favor of this movement is that it involves diversifying the type of battery so that in case there is a price spike in elements such as nickel, cobalt, or lithium, Tesla could stop using those batteries and spend temporarily at LiFePO4.