Thursday, 14 May 2020 19:02

Tesla Battery Supply in China Ready to Take a Huge Step Forward

Written by Simon Alvarez, Teslarati

Recent reports from China have suggested that Tesla battery partner Contemporary Amperex Technology Co Ltd. (CATL) is poised to ramp up and provide the electric car maker with its cells in the second half of 2020.

This update could become a valuable step towards the company’s localization of its supply chain, while opening the doors to the release of electric vehicles with batteries that have zero cobalt content.


A localized supply chain could very well be one of Tesla China’s key advantages in the country’s auto market. With more parts of the locally-made Model 3 being sourced from within the country, Tesla would be able to price the all-electric sedan in a much more competitive manner.


A good way for Tesla to accomplish this is to price its vehicles as aggressively as possible. Prior to the arrival of the Made in China Model 3, Teslas were widely considered as expensive electric vehicles that were intended for a niche market.


The locally-made Model 3 changed this, as it allowed Tesla to reach a larger demographic. With every part of the vehicle’s production that is localized, the Made in China Model 3 becomes more competitive.


It’s not all about the Model 3’s price too. Reports have previously suggested that CATL will be providing Tesla China with lithium iron phosphate (LFP) batteries, which are cobalt-free. These batteries are reportedly cheaper by a “double-digit” percentage compared to the existing cells used in the company’s vehicles, and are more environmentally-friendly due to their zero cobalt content.


If CATL’s upcoming battery ramp up involves LFP cells for Tesla China, the locally-made Model 3 will likely become an even more compelling vehicle for local customers in the near future.


We thank Teslarati for reprint permission. 

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