According to a Bloomberg report this week, chairman & CEO of Contemporary Amperex Technology Co Limited (CATL), Zeng Yuqun said they are working with Tesla to develop faster charging technology. Tesla will buy equipment from CATL to install at its battery factory in Sparks, Nevada, to expand battery production in Nevada.
The report said the factory will be built at full cost and under the control of Tesla, with CATL only responsible for helping to install the equipment and will not be involved in operations.
Citing people familiar with the matter, the report said the factory will produce batteries for Tesla’s Megapack, a large-scale energy storage system, a move that is part of a broader effort to build a supply chain for lithium iron phosphate (LFP) batteries in the US. Tesla sees sourcing the equipment as a cost-effective way to build the factory, people familiar with the matter said.
Tesla’s existing Megapack product already uses batteries from CATL, and the batteries produced at the proposed new factory will reportedly follow the design of those. CATL dominates the market for LFP batteries, which are cheaper and more stable than nickel batteries, and have the advantages of non-toxicity, superior fire safety, long cycle life and low cost compared to lithium batteries.
Wu Kai, Chief Scientist of CATL, said that the current user demand is changing, the new energy vehicles has basically solved the problem of battery life, and faster charging has become a more concerned issue for consumers.
In August 2023, CATL released the Shenxing super-fast charging batteries, which are able to “charge for 10 minutes, run 400 kilometres”, with the maximum of more than 700 kilometres. The battery is the world’s first 4C super-charged battery using lithium iron phosphate material and can achieve large-scale mass production.
In fact, Tesla has been trying to increase profits and reduce costs in the past two years by producing related models, including the Model Y, with lithium iron phosphate (LFP) batteries in China. Using LFP batteries will also help Tesla improve profits because by reducing production costs, Tesla can get more cash from car sales and buyers can benefit from longer-lasting batteries. This is a win-win for both Tesla and consumers.
With this change, Tesla has the potential to tap into new markets and reach a wider consumer base. Even Elon Musk himself has stated that “the vast majority of the heavy lifting for electrification will be iron-based cells.” And according to Ford CEO Jim Farley, lithium iron phosphate batteries will dominate by 2030-2035.
First Phosphate (CSE: PHOS) (FSE: KD0) is the only publicly listed company that is fully dedicated to extracting and purifying phosphate for the production of cathode active material for the Lithium Iron Phosphate (“LFP”) battery industry. LFP batteries operate similarly to other lithium-ion batteries. They have the advantage of being non-toxic, having superior fire safety, longer cycle life and lower cost. As the largest producer of electric vehicles in the world, Tesla confirmed that nearly half of all its vehicles are already using lithium iron-phosphate (LFP) batteries. First Phosphate is the Building Block for a North American LFP Battery Ecosystem, the company holds a total of 1,500+ sq. km of royalty-free land claims in the Saguenay-Lac-St-Jean Region of Quebec, Canada consisting of rare anorthosite igneous phosphate rock that generally yields high purity phosphate material devoid high concentrations of harmful elements.
If you are interested in electric vehicles and battery technology, please pay close attention to First Phosphate Corp.
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