Tesla is rumored to have secured a giant order of 45 GWh of lithium iron phosphate (LFP) battery cells from CATL.
It comes as Tesla announced its global move to LFP for standard range cars.
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.
It also frees up the production of battery cells with other, more energy-dense chemistries to produce more longer-range vehicles.
Tesla already moved its Standard Range Model 3 and Model Y produced in China to LFP cells.
Last week, Tesla also announced it is “shifting to Lithium Iron Phosphate (LFP) battery chemistry globally” for “standard range vehicles.”
It would mean that the automaker plans to switch the Model 3 Standard Range Plus being produced in Fremont factory to LFP cells, too.
Now a new report from China states that Tesla secured an order of 45 GWh of LFP cells from CATL for next year (translated from Chinese):
36 Kr learned from a number of people familiar with the matter that Tesla has booked 45 GWh lithium iron phosphate batteries from China’s leading power battery company CATL for next year’s sales plan, mainly for Model 3 and Model Y models.
Such a quantity would be enough to produce between 700,000 and 800,000 vehicles, depending on the mix of standard range models.
Considering battery cell supply is one of Tesla’s biggest bottlenecks, it could point to significant growth for Tesla next year.
The report claims that Tesla might have secured enough battery cells to produce around 1.5 million vehicles in 2022.
The same reports also mention continued talks between Tesla and CATL for further battery supply contracts.
As we previously reported, CATL has emerged as a new important partner for Tesla since the start of production at Gigafactory Shanghai.
Now the world’s largest battery cell manufacturer is also working to produce the new Tesla-designed 4680 cell.
FTC: We use income earning auto affiliate links. More.