In view of the recent surge in battery raw materials such as nickel and cobalt, Tesla (TSLA-US) said on Wednesday (20th) that the company’s full-standard version of the nickel-cobalt alumina ( NCA) batteries will be converted to lithium iron phosphate (LFP) batteries.
Tesla said that the company’s battery production is gradually shifting to LFP batteries, which are currently being produced in the Shanghai Super Factory. Tesla asked customers in the United States who booked Model 3 in September whether they would accept LFP batteries for electric vehicles instead of the original NCA batteries.
According to Roskill, a material research consultant, LFP batteries are commonly used in China, and about 95% of LFP batteries are made in China.
Guidehouse Insights principal analyst Sam Abuelsamid said that LFP batteries are cheap, do not require any nickel or cobalt, are more stable and safer, but have lower battery density, can afford less mileage and are not cold resistant.
Affected by the reduction of annual nickel production by large miners such as Vale, the three-month nickel futures price on the London Metal Exchange (LME) closed up 4.6% to US$20,963 per ton. It rose by 5.9% at one time and reached US$21,235 per ton. , A new high in 7 years.
As battery materials soared, Abuelsamid believes that Tesla’s decision to replace batteries will allow the company to increase profits without adjusting the price. In addition to Tesla, Ford and Volkswagen are also interested in batteries for low-cost cars and trucks.
Taylor Ogan, CEO of long-term Tesla long-term Snow Bull Capital, said that LFP batteries are cheaper, safer, and can be fully charged without worrying about degradation. In addition, this kind of battery is easy to recycle, and it is easier to purchase raw materials, which is also the reason for the high adoption rate of LFP in China.
The two main manufacturers of LFP batteries are CATL and BYD. Previously, Tesla had begun to purchase batteries from CATL.
