San Francisco: As Tesla’s profits and prices grabbed headlines last week, a potentially pivotal development for the global car industry flew largely under the radar.
The American EV pioneer disclosed that nearly half of the vehicles it produced in the first quarter were equipped with lithium iron phosphate (LFP) batteries - a cheaper rival to the nickel-and-cobalt based cells that dominate in the West.
The revelation, eclipsed by the carmaker’s $19 bn revenue and Musk’s Twitter charge, was the first time Tesla had disclosed such specifics about its batteries make-up. It flashed a strong signal that iron-based cells are finally starting to win global appeal at a time when nickel is blighted by supply concerns due to major producer Russia’s war in Ukraine and cobalt is tainted by reports of dangerous conditions at artisanal mines in Democratic Republic of Congo.
Tesla is not alone in betting that LFP batteries, already popular in China, can make inroads into Western markets.
Tesla has been using LFP in some entry-level, US-made versions of its Model 3 since last year, expanding their use of the technology beyond China, where about two years ago it started using LFP batteries made by Chinese firm CATL, the world’s largest EV battery maker, for some Model 3s.
Yet given the historic dominance of nickel-and-cobalt based batteries in the US, the scale of Tesla’s usage of LFP cells in the first quarter of 2022 - fitted in roughly 150,000 cars produced - took some analysts and battery specialists by surprise.
Tesla did not respond to a request for comment.