Tesla will only use iron-based batteries for standard EV models – TechCrunch


Tesla announced Wednesday that it will use iron-based batteries for its standard Model 3 and Model Y models in global markets. The update, provided in the third quarter earnings reportconfirmed hints that Tesla CEO Elon Musk has for months dismissed the growing role of cheaper battery chemistry in the company’s product lineup.

Lithium iron phosphate (LFP) batteries use older, cheaper battery chemistry and are popular in China. Outside of China, electric vehicle batteries are mostly nickel-based, either nickel-manganese-cobalt or nickel-cobalt-aluminum. But beyond the cost savings, LFP battery cells are attractive because they don’t rely on ultra-scarce raw materials like cobalt and nickel. Notably, Tesla Chief Financial Officer Zach Kirkhorn confirmed on an investor call Wednesday that the company has seen impacts on nickel and aluminum prices.

One of the main reasons why LFP batteries aren’t seen much outside of China has to do with a series of key LFP patents, which have allowed the country to dominate the LFP market.

But those patents will soon expire, and it looks like Tesla has its eye on that delay, with executives suggesting the company intends to bring LFP battery production to the same places it manufactures its vehicles.

“Our goal is to locate all key vehicle parts on the continent — at least on the continent, if not closer, to where the vehicles are produced,” Drew Baglino, senior vice president of the powertrain and energy engineering at Tesla. “That’s our goal. We work internally with our suppliers to achieve this goal, and not just at the final assembly level, but as far upstream as possible.

The company also provided a very brief and slightly hedging update on its 4680 battery, a custom cell design it created in-house. Tesla said the 4680 battery will be capable of greater energy density and longer range. Baglino said the 4680 is on track to ship in vehicles early next year, with structural testing and validation on schedule. But while the company is happy with the timeline, “this is a new architecture and unknown unknowns may still exist,” Baglino added.

“From an airframe perspective, we are comfortable with design maturity and manufacturing readiness matching the pack schedule I just mentioned,” he added.


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