Tesla could be planning to use lithium batteries made without cobalt for its electric cars in China according to reports from industry insiders.
Advanced talks with Chinese battery maker Contemporary Amperex Technology Co Ltd (CATL) to make cobalt-free batteries are underway, sources familiar with the matter told Reuters, in an effort to lower the cost of Tesla electric vehicles.
Cobalt is one of the most expensive components used in the manufacturer of electric vehicle (EV) batteries, and a key reason behind the high cost of batteries which prices them above their internal combustion engine equivalents.
Its use has also drawn a great deal of criticism because of the harsh conditions in some countries where it is mined, implicating tech companies including Tesla in a lawsuit over the alleged death and injury of children mining in the Democratic Republic of Congo.
The use of the lithium iron phosphate (LFP) batteries made by CATL, which are reportedly cheaper than lithium-ion batteries (that use cobalt) by a “double-digit percent” according to Reuters, could deal with both problems in one blow.
While neither Tesla nor CATL would comment on the news, it is understood that talks about a deal to supply the LFP batteries have been underway for more than a year.
Electric vehicle makers commonly use nickel-cobalt-aluminum (NCA) or nickel-manganese-cobalt (NMC) lithium-ion batteries which have a higher energy density than LFP batteries.
While this would mean that Tesla cars using the same size LFP batteries would have a shorter range, they would also cost considerably less.
CATL has also been developing cell-to-pouch (CTP) technology that could see energy density increase by 10-15%, and presented the technology at the 2019 International Automobile Exhibition (IAA) in Germany.
In November, Tesla CEO and co-founder Elon Musk reportedly met for 40 minutes with CATL chairman Zeng Yuqun regarding a possible global battery deal that would make CATL the only other company outside of Panasonic with such as deal.
If the new deal for LFP batteries goes ahead, however, it would only be for cars made at Tesla’s Shanghai Gigafactory 3 for a Chinese market.
The electric car maker currently only makes the “mass-market” Model 3 sedan at the new Shanghai plant, but has begun plans to make the Model Y crossover SUV there as well.
Its “Made-in-China” (MIC) Model 3, which already costs less than the US-made counterpart, is currently made from 30% locally-made parts.
Tesla has said that it wants to use 100% locally-made components and parts for its MIC electric vehicles by the end of 2020.
It is understood that Tesla does not currently have plans to stop using NCA lithium-ion batteries.