Panasonic started supplying Tesla with lithium-ion batteries in 2009, just as the electric carmaker was getting off the ground. The Japanese battery company has remained Tesla’s primary battery supplier and is a partner in Gigafactory Nevada where many of the cylindrical cells used by Tesla are produced. Panasonic has recently committed to producing the new bigger format 4680 cylindrical cells that Tesla plans to use in its Semi and other electric vehicles.
When Tesla opened its new car factory in Shanghai, it needed a local source for batteries. It chose to use locally-produced lithium-iron-phosphate (LFP) cells from the world’s largest battery company Contemporary Amperex Technology Co. Ltd., known as CATL. The LFP cells have a lower energy density than the nickel-cobalt-aluminum (NCA) cells that Tesla uses in its other products, meaning the range of the LFP equipped vehicles is less. LFP cells are less expensive than the NCA versions and are regarded to be safer. Tesla has announced it will be selling standard-range versions of the Model 3 and Model Y in the US using LFP cells.
There have been rumors that Chinese battery-giant BYD will begin mass production of its LFP blade-style batteries for shipment to Tesla’s Shanghai Gigafactory. BYD already has a factory in the US that produces LFP cells that could also be used for Tesla’s US production. Tesla has plans to expand production in Shanghai to a million cars per year and will need more battery capacity—expect BYD to step in.
LG Energy Solution
Since the beginning of this year, Tesla has reportedly been in active talks with LG Energy Solutions (LGES) as a battery supplier. The collaboration would center around Tesla receiving batteries from LG’s Arizona factory to help bolster Tesla’s United States supply chain.