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Large Scale LFP Battery Manufacturing Coming to the U.S. - Why This Benefits Tesla

Large scale LFP battery manufacturing is coming to the U.S. and Tesla is going to benefit.

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LFP Battery Manufacturing

Lithium Iron Phosphate (LFP) battery cell manufacturer American Battery Factory (ABF) says it will establish its first battery cell gigafactory in Tucson, Arizona to produce LFP batteries - this will not be the first company to do this.

This was reported last month and the company is said to plan on 3 GWh to start with up to 15 GWh at this new site. ABF has said that the LFP battery chemistry it uses will avoid the use of nickel and cobalt, which will make its materials more ethically sourced.

It also claims that its materials will last more than double the average performance of other batteries. This claim makes sense as studies have shown that LFP batteries will last about twice as long as their counterpart, Lithium-ion Batteries, which are used in the long range and performance types of vehicles.

LFP batteries make a lot more sense in stationary storage like the Tesla Megapack, or standard range vehicles that don't need to accelerate quickly or act like a race car. Even so, my 2022 Model 3 RWD with LFP batteries can still beat most cars on the road in speed.

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The Importance of LFP Batteries

LFP batteries are very important for the future of sustainable Energy. The reason for this is that Lithium is very expensive and is getting used for most EVs. There needs to be a good option for short range EVs that will sell in large volume and for stationary storage.

Enter LFP batteries, which use iron, which is highly abundant in the world. It is only a matter of processing and manufacturing that is a bottleneck to making these batteries, not the availability of the materials.

The Tesla Model 3 will have Project Highland, which will reduce its cost, and I think Tesla will continue to use LFP batteries in this vehicle version. Other companies will do the same for their standard range vehicles, as these are the most affordable for customers right now.

ABF will create many jobs and help boost the supply of LFP batteries, which is a good thing for all EV makers. They are going to be a CATL of the United States, though not nearly as big yet.

I also see Tesla making its own LFP batteries in the U.S. and not sourcing them from CATL eventually, but ABF will be a nice step before that because Tesla can use their batteries and likely not get denied the IRA tax credit because it will be using a U.S. company in that case. This is how Tesla benefits.

What do you think of LFP battery manufacturing coming to the U.S.? Will Tesla also be making LFP batteries in large amounts?

In Related News: Elon Musk Tells Employees Not To Worry About Stock

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Jeremy Johnson is a Tesla investor and supporter. He first invested in Tesla in 2017 after years of following Elon Musk and admiring his work ethic and intelligence. Since then, he's become a Tesla bull, covering anything about Tesla he can find, while also dabbling in other electric vehicle companies. Jeremy covers Tesla developments at Torque News. You can follow him on Twitter or LinkedIn to stay in touch and follow his Tesla news coverage on Torque News.

Image Credit, Tesla, Screenshot

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