It appears that yesterday we wrote about how the Shanghai-built Model 3 sedans would start using LFP batteries on Thursday and speculated on how this change might affect the price of the cars. In fact, it was only yesterday. Now, today is here and of course, according to Reuters, Tesla China announced an 8% price cut for the Model 3. Effective immediately, the Model 3’s starting price in China is 249,900 yuan (36 $ 805). Yesterday the price was 271,550 ($ 39,900). What a difference a day makes! Both prices are net after all government subsidies are applied. Prices for the long-range rear-wheel-drive Model 3 were also slashed by nearly 10 percent, from 344,055 yuan ($ 50,668) to 309,900 yuan ($ 45,639).
LFP (lithium iron phosphate) batteries cost around 10% less than NMC (nickel manganese cobalt) which have been the mainstay of Model 3 cars to date according to Zeng Yuqun, CEO of CATL, who may or may not provide the batteries for the Chinese made the Model 3 from today. (Neither Tesla nor CATL responded to press inquiries about this.) The lower cost is mainly due to the use of iron and phosphate, which are abundant and inexpensive compared to nickel and cobalt. As ElectricGuy commented on our story yesterday, no nickel and no cobalt means no nickel and cobalt mining, a process with associated important environmental and social justice issues.
LFP batteries have somewhat lower energy densities than NMC batteries, but they are much less prone to thermal runaway events that can lead to fires or explosions. This means they need less complex – and expensive – cooling systems when installed in cars, another factor driving prices down. They are also capable of more charge cycles than NMC batteries, which increases their lifespan. When Elon Musk and Zeng Yuqun speak today of “million mile batteries”, they speak of LFP batteries.
Apparently, the change in battery chemistry had no negative effect on range, however. According to Tesla, the range is now 468 kilometers, against 445 kilometers previously listed. All range numbers of cars sold in China still use the obsolete NEDC standard.
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