Tesla uses Chinese production technology to build a new battery factory in the US

Tesla plans to increase battery production capacity by building a new factory in the US using equipment provided by a Chinese manufacturer.

Tesla plans to purchase an equipment line from Contemporary Amperex Technology (CATL), the world’s largest electric vehicle battery manufacturer, and install it in Sparks City, Nevada, USA. Tesla will have full control of the facility and pay all costs, while CATL will only assist in installing the equipment.

Tesla built a manufacturing plant in the US to avoid criticism about its dependence on Chinese partners

The new factory will produce Tesla’s line of large Megapack batteries, part of the company’s larger strategy to grow its lithium iron phosphate battery supply chain in the US. This move also allows Tesla to improve production cost efficiency and create new production facilities.

The decision was made in the context of the US government’s increasing attention to technological cooperation with China by domestic companies in many different industries, including battery production. Purchasing equipment from CATL allows Tesla to avoid the risk of criticism related to US companies’ dependence on Chinese partners.

In addition, Tesla also intends to increase the capacity of its existing battery factory in California, USA. These efforts are consistent with billionaire Elon Musk’s claim that the company’s grid storage business will grow faster than its electric vehicle business.

CATL is the world’s largest electric vehicle battery manufacturer, especially active in developing Lithium Ferrous Phosphate (LiFePO4) batteries, which are lower cost and more stable than Nickel-Metal Hydride batteries. However, due to China’s slow economic recovery, the country’s electric car market may stagnate, forcing CATL to look for new markets.

Tesla’s new factory is expected to begin operations in 2025, initially with a limited capacity of around 10 GWh. If successful in implementing and establishing the supply chain, the factory’s capacity will be expanded. The factory could supply 20% of Tesla’s battery production in the region, including the existing output of the California factory.

(theo OL)