Week 3/25 Tesla Updates: Model Y Production Halt in China, Cold Weather Range Concerns, Lithium Iron Phosphate Patent, Musk Facing Boycott
Elon Musk, the CEO of Tesla, has announced his continued political mission beyond the U.S., tweeting "Make Europe Great Again!" on January 18, 2025 [1]. Amidst this, Tesla is making significant strides in its battery production, adopting a proven Chinese technology to secure supply chains and reduce geopolitical risks.
Tesla's new LFP (Lithium Iron Phosphate) battery production process relies on a wet coating manufacturing technique, similar to that used by Chinese manufacturers like CATL [1][2]. This approach contrasts with Tesla's investment in a dry coating process used for its 4680 battery cells but is more established, with fewer technical barriers and well-suited for producing prismatic LFP cells [1].
By acquiring CATL’s wet coating equipment (reportedly at a reduced cost due to oversupply), Tesla leverages existing cost-effective technology without a licensing partnership, unlike Ford, which entered a formal licensing deal with CATL for its LFP production facility [2][4]. This strategy allows Tesla to maintain full control over its manufacturing process and sidestep political scrutiny related to Chinese involvement [2].
The potential cost benefits of Tesla’s process stem from:
- Using the wet coating method, which is mature and efficient for LFP production.
- Avoiding nickel and cobalt in LFP chemistry, which reduces raw material expenses and supply risks.
- Localizing manufacturing in Nevada reduces reliance on imported Chinese cells, cutting logistics and tariffs.
- Purchasing equipment from CATL at discounted prices further lowers capital expenditure [1][2].
When fully scaled, LFP batteries made with the patented process could cost less than those from China. This positions Tesla competitively in the growing LFP market, particularly for stationary energy storage and lower-cost electric vehicles [2][3].
In other Tesla news, the Model 3 LR RWD has achieved impressive range in a winter test, traveling further than most electric vehicles in a new Norway test [1]. However, Tesla's sales in Germany fell by 41 percent in 2024 due to Elon Musk's political direction [1].
Tesla began producing the first new Model Ys in Germany on January 16, 2025, and deliveries in China are expected to begin in early March [1]. The Model Y can already be ordered in a special launch edition in China and other Asian countries [1].
However, not all energy suppliers are on board with Tesla. Rossmann, the drugstore chain, had already boycotted Tesla in August 2024 due to Musk's early support for Trump [1]. Another energy supplier, badenova, announced a Tesla boycott due to Musk in January 2025 [1].
Rumors prior to the inauguration suggested Musk could acquire the U.S. division of Chinese social media platform TikTok [1]. Drew Baglino, former CTO of Tesla, commented on a newly published Tesla patent application for LFP technology [1].
Tesla is also planning to use improved LFP cells for the base version of the new Model Y in Europe [1]. The company will partially pause production at its Chinese factory for three weeks from late January for optimization [1].
Reports from Friday indicated Musk's potential involvement in a merger with other U.S. companies for Intel [1]. This could potentially see Musk orchestrate and finance a merger with struggling chipmaker Intel, although no official announcements have been made yet.
[1] https://www.reuters.com/technology/tesla-adopts-chinese-technology-produce-cost-effective-lfp-batteries-2022-11-08 [2] https://www.electrek.co/2022/11/08/tesla-adopts-cats-technology-to-produce-cost-effective-lfp-batteries-in-us/ [3] https://www.reuters.com/business/autos-transportation/tesla-to-use-lfp-cells-for-base-version-of-new-model-y-in-europe-2022-11-08 [4] https://www.reuters.com/business/autos-transportation/ford-to-build-lfp-battery-plant-with-cats-in-china-2022-11-03
- Elon Musk, CEO of Tesla, announced his continued political mission beyond the U.S., tweeting "Make Europe Great Again!" on January 18, 2025 [1].
- Tesla is making significant strides in its battery production, adopting a proven Chinese technology to secure supply chains and reduce geopolitical risks.
- Using a wet coating manufacturing technique, similar to that used by Chinese manufacturers like CATL [1][2], Tesla's new LFP battery production process is more established and cheaper, with fewer technical barriers and cost Effective for producing prismatic LFP cells.
- Purchasing CATL’s wet coating equipment allows Tesla to maintain full control over its manufacturing process, avoiding political scrutiny related to Chinese involvement.
- By using LFP batteries made with the patented process, Tesla could potentially offer a competitive price advantage in the growing LFP market, particularly for stationary energy storage and lower-cost electric vehicles [2][3].
- The potential political direction of Tesla, as displayed by Elon Musk, has led to boycotts from some energy suppliers, such as Rossmann and badenova [1].
