Tesla’s smart battery strategy in China

Tesla Model 3 made in China

Once again Tesla is showing what’s the smartest strategy to achieve the massification of electric cars. In China Tesla will use two very different battery chemistries for the Model 3. One to give the lowest cost/higher availability and another to give the best range.

In this article we’ll see why Tesla’s new battery strategy will probably be adopted by other automakers.



This is the kind of article I like to write, it will be long…


Let’s start by differentiating the most popular battery chemistries today, to understand Tesla’s choice.



LTO anodes are usually combined with NCM cathodes. They are better suited for ESS (Energy Storage Systems), since they contribute to make the batteries large, heavy and expensive. However, they are extremely safe and durable.


Lithium Titanate Oxide (LTO)

  • Energy density: (β˜…) 1/5
  • Power density: (β˜…β˜…β˜…β˜…β˜…) 5/5
  • Cycle life: (β˜…β˜…β˜…β˜…β˜…) 5/5
  • Safety: (β˜…β˜…β˜…β˜…β˜…) 5/5
  • Cost: (β˜…) 1/5



For electric cars the focus has been on improving the cathodes. They are usually paired with graphite anodes, but more recently a mixture of graphite with silicon has been used to achieve higher energy density. However, the use of silicon comes at the cost of reducing cycle life, due to swelling of the anode.


Lithium Ferro Phosphate (LFP)

  • Energy density: (β˜…β˜…) 2/5
  • Power density: (β˜…β˜…β˜…β˜…) 4/5
  • Cycle life: (β˜…β˜…β˜…β˜…) 4/5
  • Safety: (β˜…β˜…β˜…β˜…β˜…) 5/5
  • Cost: (β˜…β˜…β˜…β˜…β˜…) 5/5


Lithium Ferro Manganese PhosphateΒ (LFMP)

  • Energy density: (β˜…β˜…β˜…) 3/5
  • Power density: (β˜…β˜…β˜…β˜…) 4/5
  • Cycle life: (β˜…β˜…β˜…) 3/5
  • Safety: (β˜…β˜…β˜…β˜…β˜…) 5/5
  • Cost: (β˜…β˜…β˜…β˜…) 4/5


Lithium Nickel Cobalt Manganese (NCM 333 or 111)

  • Energy density: (β˜…β˜…β˜…) 3/5
  • Power density: (β˜…β˜…β˜…) 3/5
  • Cycle life: (β˜…β˜…β˜…β˜…) 4/5
  • Safety: (β˜…β˜…β˜…β˜…) 4/5
  • Cost: (β˜…β˜…) 2/5


Lithium Nickel Cobalt Manganese (NCM 523)

  • Energy density: (β˜…β˜…β˜…β˜…) 4/5
  • Power density: (β˜…β˜…β˜…) 3/5
  • Cycle life: (β˜…β˜…β˜…) 3/5
  • Safety: (β˜…β˜…β˜…) 3/5
  • Cost: (β˜…β˜…β˜…) 3/5


Lithium Nickel Cobalt Manganese (NCM 622)

  • Energy density: (β˜…β˜…β˜…β˜…) 4/5
  • Power density: (β˜…β˜…β˜…) 3/5
  • Cycle life: (β˜…β˜…β˜…) 3/5
  • Safety: (β˜…β˜…β˜…) 3/5
  • Cost: (β˜…β˜…β˜…) 3/5


Lithium Nickel Cobalt Manganese (NCM 712)

  • Energy density: (β˜…β˜…β˜…β˜…β˜…) 5/5
  • Power density: (β˜…β˜…) 2/5
  • Cycle life: (β˜…β˜…) 2/5
  • Safety: (β˜…β˜…) 2/5
  • Cost: (β˜…β˜…β˜…β˜…) 4/5


Lithium Nickel Cobalt Manganese (NCM 811)

  • Energy density: (β˜…β˜…β˜…β˜…β˜…) 5/5
  • Power density: (β˜…β˜…) 2/5
  • Cycle life: (β˜…β˜…) 2/5
  • Safety: (β˜…β˜…) 2/5
  • Cost: (β˜…β˜…β˜…β˜…) 4/5


Lithium Nickel Cobalt Aluminium (NCA)

  • Energy density: (β˜…β˜…β˜…β˜…β˜…) 5/5
  • Power density: (β˜…β˜…β˜…) 3/5
  • Cycle life: (β˜…β˜…β˜…) 3/5
  • Safety: (β˜…β˜…) 2/5
  • Cost: (β˜…β˜…β˜…β˜…) 4/5


Now that you know the main advantages and disadvantages of the most popular battery chemistries it’s easy to guess which ones Tesla chose for different purposes…


Tesla Model 3 Standard Range

For the standard range Model 3 in China, Tesla will use LFP or LFMP battery cells from CATL. Not only these battery cells don’t require cobalt – meaning lower cost and higher availability -, they also don’t require a very complex TMS (Thermal Management System), since they are very safe.


Now, let’s see what to expect…


With LFP battery cells Tesla can put in the Model 3 a 50 kWh battery for 4.000 euros that handles 4.000 complete charge/discharge cycles before reaching the EoL (End of Life). EoL is reached when the battery only retains 80 % of its initial capacity. This means that if when new the Tesla Model 3 Standard Range had an average range of 300 km, after 4.000 cycles and 1.080.000 km [(300 + 240) / 2 x 4.000] the range would still be 240 km.


Hypothetical Tesla Model 3 LFP battery

  • Cost: 4.000 euros
  • Capacity: 50 kWh
  • Range: 300 km when new, 240 km after 1.080.000 km


Tesla Model 3 Long Range

For the long range Model 3 in China, Tesla will use a high nickel-content chemistry (NCM 712, NCM 811 or NCA), probably from LG Chem. These battery cells offer the best energy density, which allows a higher range. However, they still require some cobalt, which makes them more expensive and with lower availability.


Now, let’s see what to expect…


NCM 811 battery cells

  • Gravimetric energy density: 300 Wh/kg (50 % more than LFP)
  • Volumetric energy density: 700 Wh/L (68 % more than LFP)
  • Cycle life: 1.000 cycles
  • Cost at pack level: 100 euros per kWh



With NCM 811 battery cells Tesla can put in the Model 3 a 75 kWh battery for 7.500 euros that handles 1.000 complete charge/discharge cycles before reaching the EoL (End of Life). EoL is reached when the battery only retains 80 % of its initial capacity. This means that if when new the Tesla Model 3 Long Range had an average range of 450 km, after 1.000 cycles and 405.000 km [(450 + 360) / 2 x 1.000] the range would still be 360 km.


Hypothetical Tesla Model 3 NCM 811 battery

  • Cost: 7.500 euros
  • Capacity: 75 kWh
  • Range: 450 km when new, 360 km after 405.000 km


As you can see, using two different battery chemistries allows Tesla to offer its customers the choice between the best range and the best cost. Moreover, using different suppliers and raw materials makes Tesla less prone to have battery production capacity problems. This strategy should be adopted by every automaker. Being tied to limited suppliers and/or raw materials isn’t very wise.



Currently the Nissan LEAF is available to order with two different battery packs, but both use the exact same Envision AESC cells. The 40 kWh battery pack is made with 192 (96s2p) NCM 523 battery cells, while the 62 kWh pack is made with 288 cells (96s3p). Later this year, Nissan is expected to upgrade to NCM 811 battery cells.



The Volkswagen ID.3 will be offered with three different battery capacities, the mid range version will use NCM 622 battery cells, while the long range version will use the NCM 811 type. There’s a chance that the standard range version will use LFP cells, but so far it’s only an unconfirmed possibility… It would be great to have at least one battery pack option built with cobalt-free cells, which are made with abundant raw materials – making them cheap and highly available to boost production.

The entry-level version of the ID.3 is expected to arrive next year and will cost less than 30.000 euros. With a 48 kWh (45 kWh usable) battery it gets a WLTP range of 330 km. If Volkswagen does put a LFP battery from CATL in it, it’ll be highly profitable and I expect the production capacity to be very high (could surpass the Tesla Model 3).


Battery costs roadmap by Volkswagen


Nonetheless, already this year, even with still requiring some cobalt in their battery cells, Volkswagen expects to achieve a kWh cost below 100 euros (at the pack level), which is very good and probably only second to Tesla.


Summing up, until we have the ultimate battery (high energy density made with abundant raw materials) every electric car should be offered with two different battery packs. One made with abundant and cheap raw materials to offer the best cost and availability, and another more energy dense battery pack to offer the best range with a higher cost and limited production.

For example, with this strategy my favorite electric supermini, the Renault ZOE could be available with a 40 kWh LFP battery and a 60 kWh NCM 811 battery. With a 40 kWh LFP battery the ZOE would not only cost Renault less to produce than its gas-counterpart (the Clio), it could also reach the same production levels since the raw materials are abundant.


Hypothetical Renault ZOE LFP battery

  • Cost: 3.200 euros (3.840 euros with a 20 % profit margin)
  • Capacity: 40 kWh
  • WLTP range: 300 km when new, 240 km after 1.080.000 km


Thanks to its excellent cycle life, this battery option would be perfect to use with Vehicle-to-Grid (V2G) technology. Actually, it might be the only battery chemistry that finally makes V2G rational to implement.


Hypothetical Renault ZOE NCM 811 battery

  • Cost: 6.000 eurosΒ (8.400 euros with a 40 % profit margin)
  • Capacity: 60 kWh
  • WLTP range: 450 km when new, 360 km after 405.000 km


The more energy dense battery should be considered a premium option and sold with a higher profit margin.


I’m looking forward to see which automaker will be the first to make its electric cars available with a cobalt-free battery pack option in Europe or North America. My guess is one that already has ties with CATL, so probably Tesla, Volkswagen or PSA. What do you think?



More info:




Pedro Lima

My interest in electric transportation is mostly political. I’m tired of coups and wars for oil. My expectation is that the adoption of electric transportation will be a factor for peace and democracy all over the world.

28 Responses

  1. Booms says:

    Great article as always. Out of interest, where do you get the €80/kWh value? As you say that pretty much brings us to price parity with ICE cars.

  2. Frank says:

    You need to change your periods to commas in the numbers otherwise it doesn’t make sense.

  3. James says:

    Excellent article as always Pedro.
    I can totally understand the use of different chemistries.
    But I was surprised about the suggestion in the news that they will use prismatic cells.
    Tesla have a very effective (and highly parallel) TMS for 2170 cylindrical cells in the model 3
    so big rectangular prismatic cells would surely need a completely new TMS design and a new manufacturing line
    Can you get LFMP in 2170 format?

    • Pedro Lima says:

      Thanks James.

      I think that using pouch and prismatic cells in EVs is the way forward, it makes assembling battery packs much easier and faster.

      Back then Tesla had to use cylindrical cells because high energy density cells were only available in that format (made for laptops). I see no future for cylindrical battery cells in EVs now that high energy density cells are available in other formats. Even laptops now use pouch cells.

      Cylindrical cells will remain relevant for things like electric bikes, construction tools and flashlights.

      • Timmytool says:

        You seam to be missing the reliability of multi fused parallel packs that 2170’s and 18650’s offer. Your always going to have bad cells its statistically impossible not to. Being able to work around bad cells and just lose range with 2170’s vs having to repair a pack with one bad cell with large format pouch/prismatic cells means each cell loss is a reliability and pr problem.

  4. Marcel says:

    Great article, thanks.

  5. Johannes says:

    I think range is not as important as charging speed, how do the different chemistries compare there? e.g. the new Ioniq uses different chemistry than the old one and is much slower to charge..

  6. Pajda says:

    Hi Pedro, I am not sure if it was confirmed by Tesla that they really will use LFP in China? On the other side there is interesting information from Jason Hughes that Tesla BMS potentially have support for 108s battery. But this number does not give me much sense for NCA/NMC chemistry, because it will rise the full pack voltage to ca 450V, when the output voltage limit for Supercharger V1 and V2 is only 410V (only new SuC V3 supports 500V).

    But thanks to your article I realised that 108s connection gives much sence for LFP chemistry, because due to the lower voltage the 108s LFP battery gives similar ca 400V full pack voltage to 96s NCA/NMC.

    • Pedro Lima says:

      Hi Pajda, sorry for the very late reply.

      Not yet official, I think that Tesla is reserving all information for the Battery Day event next month.

  7. facile says:

    So life expectancy of NCM 811 battery is 1000 cycles and LMFP’s is 4 times longer?! If this is accurate, doesn’t it make you wonder which one is the real ‘premium’.

  8. Max Holland says:

    Great summary of the technology options, thank you Pedro.
    One additional useful data point – MIIT data suggests Shanghai made Model 3 is currently (December, January) sourcing 60% Panasonic cells (257.1 Wh/kg), presumably NCA, and 40% LG Chem (255.76 Wh/kg), presumably NCM 611, 712 or 811.



    Also, I think with perhaps a 3~5% kWh boost (say 60 Kwh gross rather than 58 kWh gross) to compensate for the added weight, the upcoming LFMP version of the Model 3 SR+ could still offer the same 250 (EPA) mile range as the NCA/NCM SR+

    Having said that, I agree that a decent portion of the China market would certainly accept a more affordable ~200 mile variant (no road-trip culture).

  9. Rodri says:

    Could have written: “Warning: high quality EV porn below” lol

    Great article. Brilliant link to V2G and storage. After reading I feel I already know the essence of what Tesla will tell on April’s Battery Day.

    On the great lifespan of LFMP cells I wonder if automakers outside China will be interested as longer car lifecycle will mean less future sales. Let’s hope they are more worried on the scaling and reliability of the supply chain.

  10. Carlo Marzetti says:

    Great story Pedro, would you give it a go at having it translated and posted to an Italian website? If so, please get in touch at my inbox and we talk, THX

  11. Leonid says:

    Thanks a lot Pedro great summary! @Pedro Lima
    One question:
    The Supposedly Tesla 3 cells with LFMP have a very high energy density, does the anode contains Si in this case?

Leave a Reply

Your email address will not be published. Required fields are marked *