Tesla to build battery plant in Nevada with help from CATL
Citing insiders, BNN Bloomberg reports that Tesla is planning to buy production equipment from CATL for installation in a new battery plant in the city of Sparks, which could go into operation in 2025. The people familiar with the matter say that Tesla will have full control over the plant and will bear all costs while CATL employees will only help to set up the equipment.
The plant is to manufacture LFP cells for Tesla’s stationary Megapack batteries with an initial annual capacity of around 10 GWh. In 2021, Tesla announced that stationary storage such as the Powerwall for home users and the Megapacks for large stationary power storage are to be converted to LFP cells – partly because of the availability of iron. Even though the project is aimed at stationary batteries, a later expansion to LFP cells for electric cars seems entirely conceivable. Tesla also sees the agreement with CATL to purchase equipment as a cost-effective way to set up new facilities, according to an insider.
CATL is one of Tesla’s major cell suppliers for electric cars and the two companies are quite interdependent. Before Tesla began diversifying its supply and purchasing LFP cells from the Chinese automaker and battery giant BYD, CATL was their only supplier for this cell chemistry. According to earlier information from Tesla, just over half of its global sales are accounted for by the LFP versions of the Model 3 and Model Y. According to Bloomberg, Tesla’s current Megapack product also uses CATL cells. In the 2021 financial year, Tesla was the Chinese company’s largest single customer, accounting for ten percent of sales at the time.
At the time of publishing, neither company had responded to Bloomberg enquiries on the matter.
To ramp up its overall battery production Tesla is already expanding its Giga Nevada plant in partnership with Panasonic that is located around 15 kilometers east of the city of Reno. This is where Panasonic is building 2170 round cells for the Model 3/Y in US production, and Tesla wants to produce 4680 round cells at this plant for the Semi, among other things.The town of Sparks is directly adjacent to Reno, so Tesla’s new Megapack LFP cell factory with CATL is to be located very close by its plant with Panasonic.
During the conference call following the annual figures for 2023, Elon Musk revealed that Tesla’s energy storage division is growing faster than its electric car business . Tesla’s energy storage division encompasses the Powerwall home storage systems for private customers and Megapacks for commercial and utility projects.
The limited involvement of CATL in the new factory is likely intended to evade criticism from lawmakers keen to reduce US dependence on China. Such criticism has been voiced by Republicans, for example, regarding Ford’s planned LFP battery factory in Michigan, for which the US car manufacturer wants to license technology from CATL. However, following the costly collective bargaining agreement with the UAW union, Ford significantly scaled back the factory plans in Q3 of 2023.
Including reporting by Sebastian Schaal
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