Tesla To Use Iron-Based Batteries In Semi Electric Trucks And Affordable Electric Car

Tesla Inc (TSLA.O) said it intends to increase the use of cheaper, iron-based batteries to a version of its Semi heavy electric trucks and an affordable electric car.

Tesla Chief Executive Elon Musk has advocated for the lithium iron phosphate (LFP) battery technology dominated by Chinese suppliers, saying last month, “the vast majority of the heavy lifting for electrification will be iron-based cells.”

But having Chinese suppliers set up battery plants in the United States is a challenge due to the U.S.-China political tensions.

The world’s largest electric carmaker said in its paper on “Master Plan Part 3” published on Wednesday that it will use LFP batteries for “short-range” heavy electric trucks, which it calls “Semi Light,” without giving details such as a launching date.

Tesla last December began to deliver its Semi electric trucks with a longer, 500-mile driving range per charge and which use nickel-based batteries. Tesla has previously said it will also roll out a 300-mile range version.

The carmaker said its proposed small electric vehicles will use LFP batteries with capacity of 53 kilowatt-hours (kWh), compared with 75 kWh for Model 3 and Model Y.

Tesla said in March that it will slash assembly costs by 50% in future generations of cars, which will be manufactured at its facilities in Mexico and elsewhere.

Tesla said it will also use LFP batteries in its mid-sized vehicles, Model Y and Model 3, without providing a timeline. Currently, Tesla uses nickel-based batteries for most of its Model Y and Model 3 vehicles offered for sale in the United States.

Musk and other LFP advocates pointed to the abundance and cheaper prices of iron as a major factor prevailing over the drawbacks that have hindered the adoption of LFP cells worldwide. They are larger and heavier, and generally store less energy than nickel-based cells, giving them a shorter range.

LFP cells also likely pose less of a fire hazard than nickel-based cells.

Tesla currently buys LFP batteries from China’s Contemporary Amperex Technology Co (300750.SZ), which does not have a plant in the United States. Tesla’s South Korean supplier, LG Energy Solution (373220.KS), said it intends to build LFP batteries at its proposed Arizona factory.