Batteries are the heart of all EVs and one of Tesla’s key battery suppliers, CATL, has remained on top in the battery race.
So what has helped them to stay on top compared to other battery suppliers and how does their affinity with Tesla ensure that many of the EVs we drive in Australia will have their batteries powering our transport?
CATL may remain a lesser-known name in the automotive world, but in the first three months of 2022 it reached 35% of the world’s battery supply maintaining its leadership as the world’s largest battery maker.
Other more well-known brands like LG, Panasonic and Samsung’s combined market share was lower than CATL alone.
Tesla and demand in nickel-free batteries behind growth in 2022
Tesla recently stated in their earnings report that nearly half of all their cars delivered in Q1 2022 contained a nickel-free LFP (lithium iron phosphate) battery pack. On batteries they stated in their Q1 update:
“Diversification of battery chemistries is critical for long-term capacity growth, to better optimize our products for their various use cases and expand our supplier base,” Tesla wrote in its Q1 2022 earnings report.
“This is why nearly half of Tesla vehicles produced in Q1 were equipped with a lithium iron phosphate (LFP) battery, containing no nickel or cobalt.”
CATL is one of those key suppliers that supplied LFP batteries for their cars, ensuring the cost to produce a Tesla remained low at a time when the metal prices such as nickel and cobalt skyrocketed. Australian customers reaped benefits from price increases on the back of greater
Prices for LFP-equipped EVs such as Tesla’s Model 3 RWD held for most of Q1. More recently though prices have increased, with the Tesla Model 3 increasing by $4,000 for the LFP battery-equipped RWD model. This is Tesla’s most popular configuration amongst its customers due to its price.
Australian impacts of CATL’s growth
Having a constant supply of batteries will determine the winners and losers in this once in a lifetime EV revolution.
Australians are looking for more affordable EVs and the high price of batteries is a major contributor to the cost of EVs. Therefore, battery manufacturing with suitable technologies is needed to produce more affordable battery packs.
CATL’s success with manufacturing LFP batteries at scale can only be good for the overall EV industry. It means more affordable Tesla and other EVs on our roads which would further increase EV uptake in Australia.
Riz is the founder of carloop based in Melbourne, specialising in Australian EV data, insight reports and trends. He is a mechanical engineer who spent the first 7 years of his career building transport infrastructure before starting carloop. He has a passion for cars, particularly EVs and wants to help reduce transport emissions in Australia. He currently drives a red Tesla Model 3.