Tesla is reportedly in advanced stages of discussion to use batteries from Contemporary Amperex Technology Co Ltd (CATL), a company it had recently signed a deal with for battery supplies. The move will see the automaker use a new lithium iron phosphate (LFP) batteries which contains no cobalt, a metal that is considered to be one of the most expensive material in electric vehicle batteries.

The adoption of LFP will be a first for Tesla, with Reuters stating that the move is part of Tesla’s efforts to drive down production costs for cars – particularly the Model 3 – made at its China plant. This is to curb slumping EV sales in the region that’s currently crippled by the Covid-19 novel coronavirus outbreak.

Apparently, Tesla has been talking to CATL for over a year to supply LFP batteries. Cost-wise, LFP batteries is cheaper to manufacture than existing batteries by a ‘double-digit percent’, a source claims. Tesla currently uses nickel-cobalt-aluminium (NCA) cylindrical batteries for its China-made Model 3, which is higher in density and offers more driving range.

One downside of LFP cells is its lower energy density, but to combat this, CATL is developing its cell-to-pack technology, which allows the cells to be directly integrated into packs without using modules. This saves space, meaning the volumetric density of the battery pack can be increased to fit the same footprint, leaving operating range unaffected.

LFP cells are also said to last longer due to its chemical composition, but it’s unclear what the weight difference is between prismatic LFP packs and cylindrical NCA packs. According to reports, it’s possible for the Tesla Model 3 Standard Range Plus to get the same 50 kWh rating via the prismatic LFP pack.

Meanwhile, a source also told Reuters that Tesla has no plans to stop using NCA batteries for the time being. The move to use LFP batteries appears to be limited to Model 3s made in its China plant, and Tesla is currently seeking regulatory approval to make longer-range Model 3 cars at the plant.

The use of LFP batteries will also help Elon Musk meet a promise he made in 2018, one which will see Tesla cut the use of cobalt to zero. At press time, cobalt costs around US$33,500 (RM142k) a tonne.