even cheaper batteries for Model 3 and Model Y

Tesla Model 3 logo

New, less expensive Tesla batteries are confirmed thanks to sources cited by Reuters, which could result from more accessible Model 3 and Y models, at least in China at first.

More than the quarterly results, “Battery Day” is certainly the most anticipated Tesla event of the year 2020. Elon Musk has not yet given an exact date, but the content is precise in May.

LFP batteries with CATL

A few days ago, a new battery cell technology was emerging through a patent filing. The CEO had commented on this news, confirming a ” great importance “ in the future of the brand. Here Reuters provides a wealth of information on this new generation of batteries that will equip the Model 3 and Model Y in China.

According to the agency, the manufacturer is developing this new technology with local CATL, one of the major players in batteries. The composition of these batteries is still unclear. Reuters sources say they may be low in cobalt, and adopt “Chemical additives, materials and coatings allowing […] to accumulate more energy “. The chemistry may be of the lithium iron phosphate (LFP) type. Less expensive, it would be free of cobalt.

For this reason, this so-called “Million mile battery” or “battery at 1.6 million km” will therefore be a priority in China. In this market where Tesla’s competition is complete with local brands, price is the key. A revolutionary battery which could then be deployed in North America and Europe.

Economies of scale in sight

The industrial process will also play its role. During a question and answer session organized with investors on April 29, Elon Musk said that the Tesla Gigafactory would become “A Terafactory” with regard to its production capacity. The increase in capacity and the increased automation will therefore have a consequence on the final cost of the batteries. Recycling of lithium, cobalt or nickel will be useful. On this point, the Musk firm would collaborate with the company Redwood Materials, created by the co-founder of Tesla, JB Straubel.

The ultimate goal would be to go below $ 100 / kWh, a level where electrics would clearly become competitive with gasoline or diesel. According to Reuters, CATL’s LFP technology would cost modules of $ 80 / kWh. This type of module would be used for example on the Xpeng G7, promising a range of more than 700 km for a price lower than Tesla.

In concrete terms, will this give a Tesla Model 3 cheaper, with more autonomy? With these elements, yes, but initially in China. Please note: Tesla has not confirmed any of this information. In parallel, CATL plans to supply 50% nickel / 20% cobalt NMC cells. Different from LFP cells, they are therefore more expensive per kWh, but less than the cells currently used.


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