Tesla to build small new LFP battery cell factory with CATL machines, report says

A new report states that Tesla is going to build a small new LFP battery cell factory with CATL machines in Nevada.

According to a new report from Bloomberg report, Tesla plans to build a “small facility” using “idle equipment” from CATL.

The publication wrote:

The automaker plans to buy machinery from CATL, as the battery maker is known, and install it in the city of Sparks, said the people, who asked not to be identified. Tesla will have full control of the facility and cover 100% of the costs, and CATL personnel will be uninvolved other than helping to set up the equipment, they said.

The new “small facility” will reportedly build LFP battery cells for Tesla’ Megapacks.

The fact that it will use machines from CATL is expected to enable Tesla to quickly bring the facility to production.

LFP battery cells are cheaper, more reliant, than nickel-based Lithium-Ion batteries, but they are also less energy densed, which makes them ideal for stationary energy storage products.

The production of those cells has been limited to China until recently. Now, it’s making its way to North America, especially due to the protectionist regulations around the $7,500 federal tax credit for electric vehicles, which requires batteries to be made in North America.

LFP cells are starting to be popular on lower-end EVs with shorter range.

CATL is already one of Tesla’s top suppliers of LFP battery cells for its electric vehicles, especially those produced in China.

Electrek’s Take

I would take the report with a grain of salt. I’m not saying it’s wrong, but the sources are not clear. Bloomberg mentions “people” on some statements and “a person” on another.

Also, it talks about the facility being in Sparks, Nevada, where Tesla’s Gigafactory Nevada is located and where it is currently expanding production to include Tesla Semi production and battery cell production, but the report doesn’t talk about the new facility being at Gigafactory Nevada or not.

Again, it doesn’t mean the report is wrong. I just recommend caution.

Otherwise, it does make sense. CATL is a Tesla cell supplier, but the US has been wary of Chinese cell manufacturers coming to the US to take advantage of the tax credit. This is a way that benefits everyone as Tesla is the manufacturer but it is using CATL’s expertise through its machinery.