Elon Musk is indicating that Tesla could be shifting more electric cars to LFP battery cells due to concerns about the long-term availability of the nickel supply.
Last year, Tesla CEO Elon Musk mentioned that he believes the energy density of iron phosphate (LFP) batteries has improved enough that it now makes sense to use cheaper, cobalt-free batteries in their low-cost vehicles. .
In addition, the CEO indicated that the use of LFP batteries also releases more battery supply of chemical lithium-ion cells using nickel cathode for other Tesla vehicle programs.
In October 2020, Tesla started producing the Gigafactory Shanghai Model 3 Standard Range Plus with LFP battery cells.
The change was significant because Tesla also started exporting this new version of the Model 3 outside of China for the first time.
This new 3 Standard Range Plus model made in China with LFP batteries turned out to be Tesla’s new entry-level model in Europe and other markets.
In the United States, Tesla is still producing the Model 3 Standard Range with lithium-ion battery cells with nickel cathode, but now Elon Musk seems to be indicating a possible change there as well.
When discussing the availability of battery resources in Twitter last night, Musk said Tesla is “changing standard range cars to an iron cathode”:
Nickel is our biggest concern for increasing the production of lithium-ion cells. That’s why we’re changing standard range cars to an iron cathode. Too much iron (and lithium)!
The comment seems to suggest that the move is underway and therefore could expand beyond just vehicles produced in China.
Lately, the CEO has expressed concern about the availability and price of nickel.
During Tesla’s earnings statement in July 2020, Musk pleaded with miners to increase their nickel production:
Well, I would just like to emphasize again, any mining company out there, please mine more nickel. OK. Wherever you are in the world, mine more nickel and don’t expect nickel to return to a very long point – some high point that you experienced about five years ago, whatever it is. Seek efficiency and, obviously, environmentally friendly nickel mining at high volume. Tesla will give you a giant contract for a long period of time, if you extract nickel in an efficient and environmentally responsible manner. I hope this message will reach all mining companies. Please get nickel.
Nickel prices have been rising recently and have already risen 16% this year, partly due to demand for electric car batteries.
Battery cells with nickel cathodes have more energy and power density than cells that use iron phosphate, so that’s why Tesla is only using the latter in short-range electric vehicles.
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