Electric vehicle giant Tesla is apparently planning to expand its battery cell production by constructing a new factory in the state of Nevada, Bloomberg reports, citing people familiar with the matter. What’s more interesting about this news is the potential integration of CATL’s machines in the upcoming small lithium-iron-phosphate (LFP) battery plant.
Report highlights
Tesla is exploring a potential investment in a new LFP battery factory in Sparks, Nevada. As mentioned, the Musk-led company reportedly plans to use CATL’s machines in battery cell production.
However, Tesla will retain the full ownership of the new battery factory. It will also manage the full construction expenses, with CATL only handling the equipment setup.
“The automaker plans to buy machinery from CATL, as the battery maker is known, and install it in the city of Sparks, said the people, who asked not to be identified. Tesla will have full control of the facility and cover 100% of the costs, and CATL personnel will be uninvolved other than helping to set up the equipment, they said.”
Bloomberg
Interestingly, the battery cell production will not support Tesla’s electric vehicle manufacturing. Instead, the American company aims to use them for the Megapack, its innovative grid-scale energy storage system.
The new Nevada battery factory will apparently have a production capacity of about 10 GWh. Tesla apparently plans to increase this output if the project succeeds and the company manages to build a solid supply chain.
Driving factors
The move is apparently a crucial part of Tesla’s strategy to expand its LFP battery production into the US, as overall manufacturing of this particular battery chemistry has been concentrated in China until recently.
It is worth noting that Tesla already employs CATL cells in its Megapacks. In that sense, it plans to manufacture similar battery types in the new Nevada factory using CATL’s machines.
LFP battery cells are more affordable and reliable than nickel-based li-ion batteries. However, they offer lower energy density that limits a vehicle’s driving range. Therefore, they are more recommendable for stationary energy storage products.
About Megapacks
Tesla Megapacks is a large-scale lithium battery storage product that offers “energy storage and support for the grid.” Each unit boasts a storage capacity of more than 3.9 MWh of energy, sufficient to sustain approximately 3,600
households for an hour. Presented below are the key specifications of the Tesla Megapacks:
| Items | Description |
| Renewable Smoothing | Balance the flow of renewables to the grid by storing and discharging energy |
| Demand Support | Discharge energy during peak demand to support distribution infrastructure |
| Infrastructure Investment | Postpone costly grid infrastructure upgrades by storing power at a single location |
| Voltage & Frequency Regulation | Stabilize voltage levels by absorbing reactive power and adjusting output |
| Market Participation | Provide energy support to the grid in response to system operator alerts |
| Microgrid | Build a localized grid that can disconnect from the main power grid |
Tesla is expected to kick off the new Nevada battery factory’s operations by 2025. It apparently has the capacity to contribute around 20% of the company’s battery production in the region in the future, including the Lathrop location.
