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Tesla is moving Model 3 Standard Range to LFP cells in Fremont, wants cell production closer

Tesla confirmed that it is moving Model 3 Standard Range production to Lithium Iron Phosphate (LFP) battery cells at Fremont factory.

The company also wants the production of the cell, which has been only produced in China, to be closer.

Over the last year, CEO Elon Musk has said multiple times that Tesla plans to shift more electric cars to LFP batteries in order to overcome nickel supply concerns.

Iron phosphate (LFP) batteries are traditionally cheaper and safer, but they offer less energy density, which means less efficient and shorter range for electric vehicles.

However, they have improved enough recently that it now makes sense to use the cobalt-free batteries in lower-end and shorter-range vehicles.

Tesla already moved its Standard Range Model 3 and Model Y produced in China to LFP cells.

In its shareholders’ presentation with Q3 2021 results yesterday, Tesla confirmed that it will move to LFP cells for all “standard range vehicles globally”:

For standard range vehicles, we are shifting to Lithium Iron Phosphate (LFP) battery chemistry globally.

The only other standard range vehicle currently produced by Tesla is the Model 3 Standard Range Plus in Fremont factory.

The problem is that LFP battery cell production is currrently centralized in China.

During a conference call following the announcement, Tesla was asked about this problem and whether or not they plan to bring production to the US.

Drew Baglino, Tesla’s senior vice president of powertrain and energy engineering, responded:

Yeah. Certainly, our goal is to localize all key parts of the vehicles at least on the continent, if not closer to where the vehicles are produced. So, that is our goal and we’re working internally and with our suppliers to accomplish and not just at the end-assembly level but as far upstream as possible.

This would mean that Tesla is working to produce its own LFP cells in the US or convince a supplier to bring LFP cell production to the continent.

Tesla has been buying LFP cells from CATL, the world’s biggest cell manufacturer.

The automaker has also been rumored to be working with BYD to buy their new “blade batteries,” which use LFP chemistry.

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