Tesla Getting LFP Batteries in the US - Why This is a Big Deal

Tesla is getting LFP batteries in the US. These are lithium iron phosphate batteries and are much more safer and efficient than current batteries. This is a big deal and will allow Tesla to produce half a million vehicles a year extra.

Rumor of LFP Battery Deal with Large US Auto Maker

There is a Chinese battery maker, Gotion High-Tech, and they confirmed that they entered into a deal to supply the LFP (lithium iron phosphate) batteries with a large US automaker. This partnership will have Gotion supplying this unnamed US automaker with LFP battery cells. It is supposed that Tesla will be this automaker.

Right now, there does not appear to be any LFP battery cells being produced in the United States. For Tesla, this is a big deal. Tesla has announced that it is transitioning to standard range vehicles and looking for a global battery chemistry. This can be seen with new names for standard range vehicles on Tesla's website as "rear-wheel drive".

There was a filing on the Shenzhen Stock Exchange which showed this important announcement. VW is one of Gotion's share holders interestingly enough.

Gotion announced that it will supply at a minimum, 200 GWh of LFP battery cells to this unnamed large US automaker and that it will supply the batteries between 2023 and 2028. The cells would come from Gotion first, but eventually, the LFP battery cell production will come to the US.

Why are the LFP Batteries Important?

The LFP batteries use more iron and Elon Musk has stated that they will have a better charge capacity and can actually charge to 100%. Elon has also stated that iron is an abundant mineral on the earth.

Tesla definitely seems to be the unnamed automaker here, but there is a chance it could be Ford, GM, or some other US automaker. The listing said it was the largest listed automobile company in the US and Tesla is certainly that.

Even though VW is a shareholder of Gotion, they are a German automaker, so the deal is not with VW. There is also a mention that there have been no prior relationships with the unnamed automaker involved.

The LFP batteries are also important for Tesla Powerwall, Powerpack, and Megapack, Tesla's stop energy storage solutions with batteries.

200 GWh of LFP battery cells over 5 years is quite a bit of power. LFP cells are typically used for smaller and shorter-range vehicles, which is why they will be used for the base models of Tesla vehicles. This deal could help Tesla support production of over half a million EV's per year.

Do you think Tesla is the automaker who will be getting the LFP batteries? If not, what other large automaker is getting them?

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Jeremy Johnson is a Tesla investor and supporter. He first invested in Tesla in 2017 after years of following Elon Musk and admiring his work ethic and intelligence. Since then, he's become a Tesla bull, covering anything about Tesla he can find, while also dabbling in other electric vehicle companies. Jeremy covers Tesla developments at Torque News. You can follow him on Twitter or LinkedIn to stay in touch and follow his Tesla news coverage on Torque News.

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