Elon Musk Says Tesla Is Shifting More Electric Cars To LFP Batteries:
Elon Musk is indicating that Tesla could be shifting more electric cars to LFP battery cells over some concerns about the long-term availability of 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 the cheaper and cobalt-free batteries in its lower-end vehicles.
Furthermore, the CEO indicated that the use of LFP batteries also frees up more battery supply of lithium-ion chemistry cells using nickel cathode for Tesla’s other vehicle programs.
In October 2020, Tesla started producing the Model 3 Standard Range Plus out of Gigafactory Shanghai with LFP battery cells.
The move was significant because Tesla also started exporting this new version of the Model 3 outside of China for the first time.
This new made-in-China Model 3 Standard Range Plus with LFP batteries ended up becoming Tesla’s new base model in Europe and other markets.
In the US, Tesla has still been producing the Model 3 Standard Range with lithium-ion battery cells with nickel cathode, but now Elon Musk thinks to be indicating a possible shift there too.
The model 3 range has now become so popular just because of its LFP battery cells.
When discussing battery resource availability on Twitter last night, Musk said that Tesla is “shifting standard range cars to an iron cathode”:
Nickel is our biggest concern for scaling lithium-ion cell production. That’s why we are shifting standard range cars to an iron cathode. Plenty of iron (and lithium)!
The comment seems that the shift is ongoing, and therefore it could expand beyond just vehicles produced in China.
Lately, the CEO has been expressing concerns about the availability and price of nickel.
During Tesla’s earnings call in July 2020, Musk pleaded with mining companies to increase their nickel production:
"Well, I’d just like to re-emphasize, any mining companies out there, please mine more nickel. Okay. Wherever you are in the world, please mine more nickel and don’t wait for a nickel to go back to some long — some high point that you experienced some five years ago, whatever. Go for efficiency, obviously environmentally-friendly nickel mining at high volume. Tesla will give you a giant contract for a long period of time if you mine nickel efficiently and in an environmentally sensitive way. So hopefully this message goes out to all mining companies. Please get nickel".
"If you want environmentally responsible nickel, I really think you have to look at sulphide deposits in first-world jurisdictions such as Canada and Australia," said Mark Jarvis, CEO of Giga Metals Corp.
"Canada has several very large, low-grade, open pitiable sulphide nickel deposits waiting to be developed, including Canada Nickel's Crawford deposit, and the Waterton's Dumont.
Canada has some of the toughest environmental regulations in the world, so if you buy your nickel from Canada, you can be assured that this part of your supply chain is ethically sourced."
Nickel prices have been surging lately and are up 16% already this year, and it is partly due to the demand for electric car batteries.
Battery cells with nickel cathodes have more energy and power density than cells using iron phosphate, hence that’s why Tesla is only using the latter in shorter-range electric vehicles.
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