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Tesla’s Switch to LFP Batteries Paves the Way for a Trend Shift

tesla model 3 lfp battery clean energy group

The future of any industry often boils down to the difference between innovation and tradition. Tesla has made waves with its innovative lithium-ion phosphate battery (LFP). To improve its profit margin on its 100% electric cars, Tesla has developed a battery with a different composition without raising the vehicle prices of its electric range. The price consistency is welcome news since Tesla has been criticized for making random changes to the costs of its cars.

News batteries are predicted to revolutionize

The news batteries are predicted to revolutionize the sustainable energy sector with the newly developed batteries featuring in the company’s Shanghai factory. These vehicles are also being sold in the Asia-Pacific jurisdiction, Europe and China.

China has welcomed the development as it supports using LFP batteries. In addition, Tesla’s trend can support LFP cathode manufacturers; 95% of all cathode production is done in China. A materials consultant and researcher “Roskill” has analyzed the benefits to the Chinese manufacturing industry post-Tesla’s decision to use the innovative batteries in all their electric cars.

Tesla has been expanding the new batteries quickly, even asking Model 3 reservation holders whether they would prefer a car powered by the LFP batteries rather than the traditional Cobalt Aluminum Oxide (NCA). The latter has been a standard for all model 3 Sedans previously sold in North America. The call for consumer preference went out in September 2021. Due to the efficiency changes achieved by Tesla, a less costly battery solution is available, allowing the company to dominate auto-market 2021.

Desire to replace nickel

The innovative process behind the LFP batteries was driven by the desire to replace nickel; costing and rationalizing nickel within the production cycle has been difficult. Elon Musk has been one of the leading advocates of a replacement option for the material to make their production more profitable. Mr. Tesla has been vocal about the product experience equivalency of nickel-based and iron-based batteries to ensure more customers opt for the LFP option, going on Twitter to ease any concerns consumers might have. Elon Musk has gone on Twitter to make these statements,

“Our intent with this pack is that product experience is roughly equivalent between nickel & iron,”

“I’d personally slightly opt for iron pack, as it wants to be charged to 100% whereas nickel prefers ~90%.”

Tesla has started a trend

Tesla did not jump the gun with these batteries, the first Chinese manufactured model 3 that featured the LFP batteries first appeared in the market in 2020. Only in October, Tesla was satisfied by the product’s market experience to extend the usage of LFP technology in all of their standard models. Tesla’s primary supplier for these batteries is the Chinese company, “China’s Contemporary Amperex Technology Co.” also the leading supplier of electric-car batteries.

Tesla has started a trend because other Chinese brands have begun to increase their LFP batteries in the newer models. According to China’s EV brands, the choice was logical and profitable because the LFP option is cost-effective, and the batteries are rated safer. In addition, companies have been quick to replace traditional batteries because LFPs are less likely to catch fire. As a result, the number of manufacturers transitioning to LFPs is promising. According to data, car batteries manufactured with the LFP technology in 2021 were 57% of the total.

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