Mobility Portal, Spain
Date: February 5, 2024
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By Mobility Portal
United States

Tesla to open US battery plant with equipment from China’s CATL

The plant, which will make cells for Tesla’s large-battery Megapack product, is part of a broader effort to onshore the supply chain for lithium-iron-phosphate cells in America.

Tesla will expand battery production in Nevada, opening a small facility using idle equipment from China’s Contemporary Amperex Technology Co. Ltd., according to people familiar with the matter.

The automaker plans to buy machinery from CATL, as the battery maker is known, and install it in the city of Sparks.

Tesla will have full control of the facility and cover 100 per cent of the costs, and CATL personnel will be uninvolved other than helping to set up the equipment, they said.

The plant is part of a broader effort to onshore the supply chain for lithium-iron-phosphate cells in America.

Tesla also sees the equipment-purchase arrangement as a cost-effective way to set up new facilities, the person said.

The move comes amid heightened scrutiny by US lawmakers and the Biden administration of technology collaboration with China in a number of fields, including production of batteries.

Tesla’s purchase may sidestep criticism about US companies’ dependence on Chinese partnerships because of CATL’s minimal involvement.

Tesla didn’t respond to a request for comment. CATL also didn’t immediately respond to a request sent outside business hours in China.

Alongside the plans for the new facility, Tesla has said it intends to double capacity this year at an existing battery factory in Lathrop, California.

The efforts support Chief Executive Officer Elon Musk’s assertion during a conference call last week that Tesla’s energy-storage operations would grow faster than its electric car business this year.

CATL, the world’s biggest maker of EV batteries, dominates the market for so-called LFP batteries, which are cheaper and more stable than nickel-based alternatives.

Tesla’s arrangement appears to be a departure from CATL’s deal with Ford Motor Co., which aims to license the Chinese company’s technology to build batteries at a Michigan plant owned by the automaker.

That project has attracted scrutiny and criticism from Republican lawmakers, who argue the company is influenced by the Chinese government and could undermine US interests.

Tesla’s existing Megapack product already uses CATL cells, and Tesla plans to follow the design of those batteries for the cells built at the new facility.

Initially, the plant will have a limited output – around 10GWH -, and be expanded if the project goes smoothly and the supply chain can be established.

The facility likely won’t be operational until 2025. It could eventually account for about 20 per cent of Tesla’s battery production in the region, including the Lathrop location.

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