Batteries Made Closer to Home
Recent rumours have surfaced pointing to a plan between Tesla and Chinese battery maker CATL to build a new Iron-phosphate - or “LFP” cell production facility in the United States.
The reporting comes from Bloomberg, who revealed that Tesla and CATL representatives both met with the White House recently. The sources asked to remain anonymous, but said that the subject of the meeting was to clarify some points about the Inflation Reduction Act - which the current administration is in the process of finalising.
Tesla has been working hard to keep to the IRA’s rules so as to take advantage of the many incentives offered by that tax program - but the company’s Model 3 sedan is about to lose the $7500 USD tax rebate because its LFP cells currently come from CATL’s main factory in China.
So aside from potentially losing out on a good incentive - having to ship in batteries from China is a logistical issue that Tesla would like to fix.
LFP cells are becoming more important in Tesla’s plans for their vehicles because Iron Phosphate batteries don’t use expensive materials like nickel and cobalt - which makes them both cheaper and more environmentally friendly, as some of the materials can be recycled.
Up until recently however, they just weren’t as energy dense as the other options, and couldn’t provide the range needed for Tesla’s vehicles. But recent advancements have come a long way to solving those issues - and now, not only is Tesla looking to partner with CATL to open a US-based facility - but Ford is too.
Right now, this new battery production facility is more-or-less a rumour - but CATL has been talking about a US factory since 2022 when it was revealed that they were looking into building a plant somewhere in North America in anticipation of the Inflation Reduction Act triggering a surge in the EV industry.
So it’s not a big secret that this was coming - only when and where.
Current reporting has the new plant being built somewhere near Tesla’s Gigafactory in Texas, but they could just as easily build a little closer to Ford and supply both companies from the same facility.
Regardless, this place will likely get built in record time - neither Tesla nor Ford are likely in the mood to waste the opportunity to get in on those IRA incentives.