Warren Buffett-backed automaker BYD Co BYDDF has secured an initial 10 GWh order for LFP battery cells from Tesla Inc TSLA, cnEVpost reported on Thursday, citing local media.
What Happened: Currently, China’s CATL — also the world’s largest electric vehicle battery maker — is the only supplier for these LFP batteries for the Model 3 and Model Y electric vehicles that are built at Tesla’s Shanghai manufacturing plant.
The battery cells would be used to power the Model 3 and Model Y vehicles, as per the report.
The Elon Musk-led company said on the latest quarterly call that it was switching to LFP batteries for standard range vehicles globally.
BYD could be a top contender to be next on Tesla’s supplier list as it has a factory in Lancaster, California. The factory makes batteries for the electric buses that BYD sells in the United States.
The company's plant, located about 500 miles from Tesla's Fremont plant, has a capacity of about 1 GWh and could be upgraded to meet Tesla's initial demand for LFP batteries, the cnEVpost report noted.
Why It Matters: The China-based BYD had last year unveiled a new blade battery cell that uses the LFP chemistry and looks like a blade. The company at the time said it would use the more safe and dense battery pack in its upcoming electric vehicles and was also in talks with other automakers to supply the cells.
Rumors about Tesla and BYD partnering for blade batteries have been floating for a while. In August, Chinese outlet cls.cn reported that BYD would begin selling its blade battery to Tesla in the second quarter of 2022.
Price Action: BYD shares closed 0.16% higher at $73.45 a share on Thursday.
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Photo: Courtesy of Tesla
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