Tesla knows that without battery manufacturing capabilities, it will always be controlled by battery factories, so it must build its own battery production line.
Qidian Lithium learned that Tesla recently announced that the first lithium iron phosphate battery factory in North America is about to be completed. The factory is located in Sparks, Nevada, USA, and is in the corner of Tesla’s Nevada Super Factory.
The Nevada Super Factory is one of Tesla’s battery factories with larger production capacity. Its products are mainly used for energy storage and automobiles. It is also preparing to build a new 4680 battery factory and an electric semi-trailer truck factory.
Theoretically, Tesla has formed a relatively complete industrial chain, such as batteries in the Nevada factory, energy storage system integration in the Shanghai factory, and power components in the German factory. However, since the existing production capacity cannot meet market demand, it will take a long time to be completely self-sufficient.
In fact, it is not only Tesla. Many lithium iron phosphate battery projects in the United States are accelerating progress. For example, LG New Energy’s Michigan factory has built two lithium iron phosphate battery production lines; the main body of the lithium iron phosphate battery factory jointly built by Ford and CATL has been completed; GM also requires the battery factory jointly invested by LG and Samsung to add a lithium iron phosphate battery production line.
01 Long preparation time
The production of the factory had an important omen before, which was Tesla’s layout in the upstream.
Last year, there were related reports that Tesla’s Texas lithium refinery had begun operation. The plant was only more than a year from construction to operation, which was extremely fast in the United States.
Located in the suburbs of Corpus Christi, the plant is the first large-scale battery-grade lithium refinery in the United States. It is also the first time that Tesla has demonstrated its lithium refining process. After mass production, the plant is expected to have an annual production capacity of 50GWh.
Not only that, the United States and other markets also hope to reduce their dependence on China in upstream materials, but planning to build more does not mean that more can be built. Tesla’s factory at least has established some hope for the budding American battery material track.
In fact, it is not just the materials of power batteries and energy storage batteries that give Americans a headache. China has already mastered most of the raw materials for batteries, accounting for about two-thirds of the global lithium chemical production, and consumer batteries as well.
It can be seen from this that establishing a complete battery industry chain has become a heart disease for Musk and even the entire United States, and it must be cured.
On June 4, Musk also specifically stated: “Tesla is gradually reducing its dependence on Chinese raw materials. This move is very prominent in the industry because other companies are still highly dependent on the supply of raw materials from China.” Tesla can be said to be the only car company trying to mass-produce batteries. It is not only battery cell manufacturing, but also covers everything from raw materials to terminals, including lithium refining, negative electrode, electrode coating, battery cell assembly, and automobiles. In response, Musk also responded that although it is extremely difficult, localizing the supply chain is crucial to reducing geopolitical risks. Not only that, Tesla is also actively seeking Japanese and Korean battery manufacturers, such as Panasonic and LG New Energy. Obviously, Tesla is trying to weave a sophisticated network covering the entire industrial chain to form a closed-loop ecosystem. This model is unique in the North American automotive industry because GM and Ford rely heavily on Asian suppliers. Tesla’s complete ecosystem is obviously particularly sensitive to the risks caused by geopolitics, and it is a direct challenge to the traditional global supply chain system, but whether it can succeed requires time to verify.
02 Can it rely on 4680 to counterattack?
Therefore, many industry insiders believe that Tesla’s current pro-China stance may just be a delaying tactic. Once the industrial chain is sound, it will completely move out of China manufacturing. This can be seen in the production of 4680 batteries. Tesla has a clear path forward.
Many of the technologies of 4680 batteries are independently developed by Tesla, such as self-refining of lithium resources, self-manufacturing of positive electrode active materials, self-electrode coating, and assembly of the entire battery in its own factory, especially dry electrode technology. If it can be industrialized, it will greatly reduce costs.
Tesla announced at an internal meeting in the first quarter of 2025 that its own 4680 battery production line has surpassed external suppliers in terms of cost-effectiveness, especially the Texas battery manufacturing team has successfully become the “leader” of battery production in the Tesla family.
Last September, Tesla announced that its annual production of 4680 batteries had exceeded 100 million. Although it cannot be completely self-sufficient, it has been continuously increasing its independent production efforts. However, whether it can completely subvert technology with 4680 is worth thinking about.
4680 batteries must be used with ternary high-nickel materials, but lithium iron phosphate has become the mainstream. 4680 batteries can only focus on the niche high-end market in the future, and Musk said in the 2021 second quarter conference call that in the long run, Tesla will use two-thirds of lithium iron phosphate batteries and one-third of nickel-based batteries.
In fact, many statements are self-contradictory.
Moreover, the technology of 4680 may not still be at the forefront of the world, because after the mass production of CATL’s Kirin battery, the 4680 advantage is not great from the comparison of parameters. The 4680 battery was released in 2020 and planned to reach a production capacity of 100GWh in 2022, but it has not been realized yet.
And the high-nickel ternary 4680 is not feasible for energy storage. At present, the capacity of large energy storage cells is generally between 500Ah and 770Ah. Chinese manufacturers are competing fiercely here, and there is no room for 4680.
Therefore, it makes sense that Zeng Yuqun of CATL said that the 4680 battery would fail. He once told Musk the pain points of cylindrical battery manufacturing and electrochemistry, and pointed out that Musk’s expertise in areas such as chips, software, hardware and machinery has little to do with batteries.
Therefore, Qidian Lithium believes that Tesla’s accelerated development of lithium iron phosphate batteries is the right choice. It is better to walk on two legs than to go all out. If the 4680 battery really doesn’t work, then the lithium iron phosphate battery will be another pillar of Tesla, so that it will not be completely strangled by the upstream.
Leave a Reply