Tesla Ing (NASDAQ: TSLA) has sounded in the past that it intends to move away from nickel-cathode batteries, given supply constraints, and CEO Elon Musk reiterated this in a tweet late Thursday.
What happened: Restrictions on nickel are the biggest concern for Tesla in the scale of lithium-ion cell production, Musk said in the tweet.
The CEO of Tesla also further added that this is the reason why the company is moving its standard range of EV models to iron cathode.
Nickel is our main concern for the scale of lithium ion production. That’s why we’re moving standard iron motors to an iron cathode. Lots of iron (and lithium)!
– Elon Musk (@elonmusk) 25 February 2021
Musk also suggested that the use of lithium-iron phosphate, or LFP batteries, would free up more battery delivery of lithium-ion chemical cells by using nickel cathodes for the company’s other vehicle applications.
Previously, Musk said the energy density of LFP batteries was enough to justify the use of these cells in low-end vehicles.
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Why it’s important: Tesla uses LFP batteries in its Model 3 model range plus vehicles manufactured in China.
Thursday’s tweet is an indication that the EV giant could move to LFP batteries in base model vehicles marketed in Europe and other regions.
Nickel is the preferred option for EV batteries due to the higher energy density and greater storage capacity.
Yet, compared to iron, nickel is expensive, with prices rising recently as the booming EV market still relies on the metal.
Nickel mining also likes environmental risks. Fitch said in a recent report that it expects the increased use of nickel in batteries from 2025 to lead to a market shortage.
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