Tesla now uses cheaper batteries in half of its new cars

Ever since Tesla announced a move to the cheaper and more accessible Lithium ferrophosphate (LFP) batteries for its standard-range electric vehicles, the exact mix of expensive nickel-cobalt batteries to LFP packs has remained unknown. In the company's latest quarterly results report, however, the ratio has finally been disclosed and it turns out that Tesla already ships almost half of its new EV production with LFP batteries inside.

Diversification of battery chemistries is critical for long-term capacity growth, to better optimize our products for their various use cases and expand our supplier base. This is why nearly half of Tesla vehicles produced in Q1 were equipped with a lithium iron phosphate (LFP) battery, containing no nickel or cobalt. Currently, LFP batteries are used in most of our standard range vehicle products, as well as commercial energy storage applications. As a result of our energy efficient motors, a Model 3 with an LFP battery pack can still achieve a 267-mile EPA range.

The standard range Model 3 and Model Y vehicles from Tesla's Shanghai factory come with LFP batteries and their production will soon spread to the Fremont, CA plant as well. In fact, Tesla may be planning to build a dedicated LFP battery plant in the US, closer to home, and could have been probing Chinese manufacturers for the task.

Tesla's CEO Elon Musk is on record saying that an EV with LFP battery pack may have very similar range to its nickel-cobalt brethren, as it can be charged to 100% without significant degradation over time. Granted, LFP packs have other disadvantages, and recently Tesla Canada advised charging them fully for better calibration and range estimates, but as far as raw material availability and prices are concerned, LFP seems to be the future for mass EV models.

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