CATL to supply EV batteries for Tesla

US-based Tesla will be manufacturing EVs using LFP batteries from China’s CATL, according to the battery maker during its annual IR conference call on May 13.

The firm plans to begin supplying the batteries to Tesla’s Shanghai Gigafactory in the latter half of this year. This marks the first time for CATL to publicly announce it is working together with Tesla.

The CATL said it will be alternate between supplying lithium ion or LFP batteries. LFP batteries are cheaper, but have lower energy density levels, which mean shorter driving distances per charge. CATL plans to address this shortcoming by using Cell-To-Pack packaging that can potentially increase the driving distance by up to 100kilometers.

CATL also is planning on more improvements, such as using high-nickel cathode and precursor batteries.

Outside of China, CATL is building another battery-making plant in Germany, where Tesla has said it would be building another Gigafactory.

Until now, Panasonic has been the major supplier for Tesla EVs, along with LG Chem which joined the supply line in September 2019. According to market research firm EV Volumes, LG Chem’s batteries accounted for about 14% of Tesla’s battery demand in the first quarter of 2020.

Currently, CATL has an annual battery production capacity of 53Gw. The plant it is currently building has a capacity of 22GWh. By 2025, it is hoping to expand to up to 100GWh.

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