CATL to supply batteries, possibly cobalt-free, to Tesla for China market

Tesla has relied on Panasonic for its battery cells since the Roadster days, but recently the automaker has suggested to the battery builder that they should start seeing other people, so to speak - at least when it comes to the Asian market. 

Above: A closer look at a Tesla battery cell (Image: Charged)

The Japanese have said they won’t be manufacturing cells for Tesla in China, which left the Californians with the options of shipping Panasonic batteries from the Nevada Gigafactory or finding a local supplier.

Last August, Tesla agreed to buy batteries from South Korea’s LG Chem, to be used in Model 3s and Model Ys manufactured at the Shanghai Gigafactory. Now Contemporary Amperex Technology (CATL), China’s largest EV battery-maker, has confirmed the signing of a two-year supplier agreement with Tesla.

Above: A look at CATL's automation production line (YouTube: Contemporary Amperex Technology Limited)

The agreement does not specify the volume of cells to be sold. However, Tesla said during its latest earnings call that its agreements with LG Chem and CATL were of a smaller scale than the existing Panasonic partnership.

In addition, it was reported (via Reuters), "Tesla is in advanced stages of talks to use batteries from CATL that contain no cobalt - one of the most expensive metals in electric vehicle (EV) batteries - in cars made at its China plant, people familiar with the matter said."

Above: CATL booth at IAA in 2019 (Image: PR Newswire)

Reuters adds, "Adoption would mark the first time for the U.S. automaker to include so-called lithium iron phosphate (LFP) batteries in its lineup, as it seeks to lower production costs... Tesla has been talking to the Chinese manufacturer for more than a year to supply LFP batteries that will be cheaper than its existing batteries by a 'double-digit percent,' said a person directly involved in the matter."

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This article originally appeared in Charged. Author: Charles Morris. Sources: Reuters, Benzinga