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China-Made Tesla Model 3 Will Ditch Cobalt, Use CATL Batteries

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China-Made Tesla Model 3 Will Ditch Cobalt, Use CATL Batteries

Contemporary Amperex Technology (CATL) has confirmed they will be supplying Tesla Inc's (NASDAQ: TSLA) Gigafactory Shanghai with batteries for use in the Standard Range Plus Model 3, according to Chinese media. These Lithium Iron Phosphate batteries contain no cobalt, a first for Tesla, and completion of a longtime goal.

Back in 2018, Musk tweeted about Tesla's current batteries having less than 3% cobalt, and that the next-gen would use no cobalt. It appears Tesla is starting to be able to make good on that comment. These batteries are also expected to cost less, saving Tesla and customers money.

Benzinga's Take: This is great news for multiple reasons. Cobalt is a controversial element due to the mining practices and environmental impact. And while the cost savings is another benefit, supply is Tesla's main gain here.

Batteries are probably the company's biggest bottleneck, and having a separate company produce and supply batteries allows Tesla to make more cars, while absorbing supply from other manufacturers.

Photo courtesy of Tesla.

 

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