Tesla production cost may drop by 25% with domestic batteries in China

On May 11, we learned from CATL’s (Contemporary Amperex Technology) 2019 annual performance briefing that the company is expected to supply power batteries to Tesla in the second half of the year. As for whether Tesla will use the CATL lithium iron phosphate battery in the domestic Model 3, CATL chairman Zeng Yuqun said, “Supply to customers is not limited to lithium iron phosphate or ternary batteries. The specific product supply depends on the market demand.”

In addition, Zeng Yuqun said: “The company has its own ‘cobalt-free’ battery technology reserve. At present, R&D is progressing smoothly, and we are looking for ways to manage the supply chain, because this is a brand-new and disruptive product.”


The batteries currently used by Tesla are all ternary lithium batteries. There is news in the industry that Tesla will purchase lithium iron phosphate batteries from the CATL and use them in the standard battery life version of the Model 3, while the long battery life version will continue to use 811 ternary batteries supplied by LG Chem. This move can reduce the cost of the domestic Model 3 by more than 25%.

When referring to BYD’s blade battery technology, Zeng Yuqun said: “The blade battery is one of our CTP structural innovation concepts for mass production in 2016. We have selected and mass produced the best of CTP structural innovations, such as CTP-0, CTP-1, CTP-2. “Due to the elimination of battery module assembly, the volume utilization rate of CTP battery packs has increased by 15% -20%, the number of battery pack parts has been reduced by 40%, and production efficiency has increased by 50 %, The energy density of the battery pack is also significantly improved, which will effectively reduce the manufacturing cost of the power battery.

It is reported that Tesla’s “Roadrunner” power battery self-production plan is starting. The production line is located in the Fremont plant in the United States. Tesla has signed an order for battery manufacturing machines with the South Korean Hanwha Group. In this regard, Zeng Yuqun said: “Tesla’s battery technology route will not have an impact on us. The two sides are discussing how to make the battery better.”

Contact the author: alfonsohayes@wheelsjoint.com


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