Tesla is looking to add EVE Energy Co. to its Gigafactory Shanghai supply chain, according to four people familiar with the matter (via Reuters).
The deal seeks to increase and bolster the number of low-cost electric vehicle (EV) batteries, to help keep up with increasing demand.
Alongside China’s Contemporary Amperex Technology Company (CATL), EVE Energy is set to become Tesla’s second supplier building lithium iron phosphate (LFP) batteries for the EV company, with the contract expected to finalize in this year’s third quarter.
While LFP batteries generally offer a shorter single-charge range than nickel manganese cobalt (NMC) batteries, Tesla has already begun rolling the new LFP batteries out in multiple markets.
Tesla Increases Price of Entry Model 3 in China https://t.co/cZ5kNV7rNr
— TeslaNorth.com (@RealTeslaNorth) May 8, 2021
Earlier this year, Tesla quietly purchased a number of patent applications from Toronto-based Springpower International, including an innovative battery production process that is similar to what was depicted at the company’s Battery Day event last fall.
Tesla’s LFP batteries were born out of a desire to make low-cost EV batteries, to be sure, but they’ve also developed from Tesla’s reduction in the use of cobalt, as well as its search for sustainable and ethical cobalt mining practices.
Recently Tesla China rivals Xpeng Motors began selling an LFP battery version of its P7 sedan, a switch from the previous NMC batteries that once were standard in EVs.
