Tesla plans to purchase equipment from Contemporary Amperex Technology (CATL), the world's largest electric vehicle battery manufacturer, and install it in Sparks, Nevada, USA. Tesla will have full control of the facility and pay all costs, while CATL will only assist in installing the equipment.
Tesla builds factory in US to avoid criticism of dependence on Chinese partners
The new factory, which will produce Tesla’s large-size Megapack batteries, is part of the company’s broader strategy to develop its lithium iron phosphate battery supply chain in the U.S. The move will also allow Tesla to improve manufacturing cost efficiencies and create new manufacturing facilities.
The decision comes as the US government is increasingly focused on domestic companies’ technological collaboration with China in a variety of industries, including battery production. Buying equipment from CATL allows Tesla to avoid the risk of criticism related to the dependence of US companies on Chinese partners.
Tesla also intends to increase the capacity of its existing battery factory in California, the US. These efforts are in line with billionaire Elon Musk's statement that the company's grid storage system business will grow faster than its electric vehicle business.
CATL is the world's largest maker of electric vehicle batteries, and has been particularly active in developing Lithium Ferrous Phosphate (LiFePO4) batteries, which are cheaper and more stable than Nickel-Metal Hydride batteries. However, China's slow economic recovery could see the country's electric vehicle market stagnate, forcing CATL to seek new markets.
Tesla’s new factory is expected to start operating in 2025, with an initial capacity of around 10 GWh. If the plant is successful in getting up and running and establishing a supply chain, the capacity will be expanded. The factory could supply 20% of Tesla’s battery production in the region, including the existing output from its California factory.
(Source: Vietnamnet)
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