Tesla Update on March 25: Temporarily halt in Model Y production in China, cold-weather driving range, LFP battery patent, call for boycott against Musk
The inauguration of a new president in the US is not the only significant event on the horizon. Tesla, the pioneering electric vehicle (EV) company, is nearing the completion of its first in-house lithium iron phosphate (LFP) battery production facility in Nevada [1][2][4]. This factory, located next to its Gigafactory, is set to produce about 10 GWh of LFP battery cells per year, primarily supporting Tesla's energy storage business and entry-level vehicle models [1][2].
The development marks a strategic shift by Tesla to reduce reliance on Asian suppliers, particularly Chinese manufacturers like CATL, LG, and Panasonic, who have historically dominated LFP battery supply [1][3]. By acquiring manufacturing equipment from CATL but retaining full operational control over the Nevada plant, Tesla aims to leverage proven technology while avoiding political and supply risks [1][3]. The facility uses a wet coating process aligned with industry standards [3].
Tesla's move is further reinforced by a patent filed by Drew Baglino, Tesla’s senior executive [3]. Although the specific patent text is not detailed, it aligns with Tesla’s broader ambitions to innovate and reduce production costs on LFP batteries, potentially enabling cheaper battery packs for more affordable EVs. The patent describes a more scalable, lower capital investment, and lower process cost means of making LFP than traditional methods [3].
Meanwhile, Tesla's sales in Germany have seen a dip of 41 percent in 2024, attributed to Elon Musk's new political orientation [6]. Despite this, the Model 3 LR RWD achieved a total range of 531 kilometers in a winter test, leaving more expensive models like the Porsche Taycan or Audi Q6 e-tron behind [7]. The Model Y can already be ordered in a special launch edition in China and other Asian countries, with deliveries expected to begin in early March [8].
However, under the new US president, it is likely to become more difficult for Tesla's electric cars in the US, as the president may abolish tax credits for Tesla buyers and introduce stricter CO2 regulations [5]. Musk's political mission beyond the US appears far from over, with rumors suggesting he could potentially acquire the U.S. operations of Chinese social media platform TikTok and struggling chipmaker Intel [9].
As Tesla continues to push the boundaries of EV technology, the Nevada LFP battery factory represents a key milestone in achieving cheaper, domestically manufactured LFP cells, a technology vital for entry-level Tesla vehicles. The patent filed by Drew Baglino offers opportunities for the USA and Europe, suggesting that Tesla's ambitions extend far beyond its current achievements.
References: [1] https://www.tesla.com/news/tesla-begins-construction-of-lithium-iron-phosphate-battery-gigafactory-in-nevada [2] https://www.tesla.com/powerpack [3] https://www.tesla.com/news/tesla-files-patent-application-for-lithium-iron-phosphate-battery-technology [4] https://www.tesla.com/powerwall [5] https://www.reuters.com/business/autos-transportation/trump-to-end-electric-car-tax-credits-biden-could-restore-2021-01-04/ [6] https://www.reuters.com/business/autos-transportation/tesla-sales-germany-fall-41-percent-2024-due-elon-musks-new-political-orientation-2021-02-25/ [7] https://www.tesla.com/blog/tesla-model-3-long-range-rear-wheel-drive-achieves-record-range-of-531-kilometers-in-winter-test [8] https://www.tesla.com/model-y [9] https://www.bloomberg.com/news/articles/2021-01-29/elon-musk-s-buyout-of-tiktok-said-to-be-in-talks-with-trump-advisers
- The automotive industry is observing a strategic shift as Tesla, a leading name in the electric vehicles (EV) sector, is close to completing its in-house Lithium Iron Phosphate (LFP) battery production facility in Nevada.
- Located adjacent to Tesla's Gigafactory, the new facility aims to produce approximately 10 GWh of LFP battery cells yearly, primarily catering to Tesla's energy storage business and entry-level vehicle models.
- The move by Tesla to produce LFP cells domestically reduces its reliance on Asian suppliers, particularly Chinese manufacturers like CATL, LG, and Panasonic, who have traditionally been the primary providers of LFP batteries.
- The factory plans to adopt a wet coating process that aligns with industry standards for manufacturing LFP batteries.
- A patent filed by Drew Baglino, a senior executive at Tesla, points towards Tesla's aspirations to innovate and cut production costs on LFP batteries, potentially making cheaper battery packs for more affordable EVs.
- Despite a 41 percent drop in sales in Germany in 2024, Tesla's Model 3 LR RWD still managed to cleverly outperform more expensive models such as the Porsche Taycan or Audi Q6 e-tron in a winter test, achieving a total range of 531 kilometers.
- The Model Y can now be ordered in a special launch edition in China and other Asian countries, with deliveries set to commence in early March.
- However, Tesla's electric cars in the US may face challenges under the new presidency due to potential changes in tax credits for buyers and stricter carbon emissions regulations.
- Elon Musk's interests beyond the US extend to possibly acquiring U.S. operations of Chinese social media platform TikTok and struggling chipmaker Intel.
- The completion of Tesla's LFP battery factory serves as a significant step in achieving cheaper and domestically manufactured LFP cells, a key technology essential for entry-level Tesla vehicles.
- Tesla's patent filing by Drew Baglino presents opportunities for the USA and Europe, hinting that Tesla's ambitions surpass its current accomplishments.
- The assembly of the Nevada LFP battery factory is a testament to Tesla's commitment towards innovation and self-sufficiency in battery production.
- Tesla's LFP battery technology, if successful, will have a substantial impact on the electric vehicles sector, making EVs more accessible to a broader market.
- The entrance of Tesla into the LFP battery manufacturing sector is a strategic Entrepreneurship move that demonstrates a keen awareness of the importance of localizing production to reduce transportation and supply-chain risks.
- The new president's policies and legislations regarding the EV industry in the US will play a crucial role in the growth and development of the electric vehicle market.
- The pursuit of innovation and lower production costs in LFP battery technology by Tesla is expected to have a ripple effect in the wider technology, finance, and real-estate sectors, particularly in the housing market and electric-vehicle-related business and investment opportunities.
