Tesla battery supplier LG will sell LFP batteries from its Chinese factory in 2023

Tesla battery supplier LG Energy Solution is looking to provide lower-cost lithium iron phosphate (LFP) batteries produced at its Chinese factory in 2023. LG’s battery ramp comes as more automakers adopt LFP batteries as a way to increase their profit margins for their respective electrical appliances. Vehicles.

LG Energy Solution has been supplying Tesla’s Gigafactory Shanghai with nickel-manganese-cobalt (NMC) battery cells – which offer longer range and higher energy density than LFP batteries – since 2020. CATL, another supplier of Tesla batteries, supplies Giga Shanghai with LFP cells which are used for entry-level vehicles such as the Model 3 RWD.

Considering that Tesla China alone is a big customer for LFP batteries, it’s no surprise that LG Energy Solution is looking to take a share of the LFP battery market. Automakers looking to expand into more affordable segments, such as Ford and Volkswagen, have announced their intentions to also use LFP batteries for their electric cars.

LFP batteries actually offer some advantages over other lithium-ion chemistries such as NCA and NCM because they do not use cobalt, offer long life and have excellent security. However, they also have a lower energy density, which results in a shorter range. LFP batteries have proven to be a good fit for Tesla’s entry-level electric vehicles, which still offer over 250 miles of range because of their effectiveness. This strategy is now being adapted by other automakers like Ford and Volkswagen.

Tesla’s use of LFP batteries for its standard-range cars has been so successful that in the company’s first quarter 2022 update letter, the electric vehicle maker revealed that nearly half of vehicles that it produced in the first quarter were equipped with LFP cells. Tesla also indicated in its update letter that it will also use LFP batteries for its energy storage products.

“Nearly half of Tesla vehicles produced in the first quarter were equipped with a lithium iron phosphate (LFP) battery, which contains no nickel or cobalt. Currently, LFP batteries are used in most of our vehicle products in the standard range, as well as in commercial energy storage applications. With our energy-efficient motors, a Model 3 with an LFP battery can still achieve a range of 267 EPA miles,” Tesla noted.

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Tesla battery supplier LG will sell LFP batteries at low prices from its Chinese factory in 2023