Tesla Begins LFP Battery Production: Was China’s Strategy the Right Move?

In the early stages of battery technology, NMC (Nickel-Manganese-Cobalt) chemistry was the dominant choice. However, China made a sudden strategic shift toward LFP (Lithium Iron Phosphate) technology. While initially seen as controversial, this transition has gradually reshaped the dynamics of the sector.

Tesla has long sourced LFP batteries from Chinese suppliers and used them in some of its vehicles. Now, the company is starting to produce LFP batteries itself. This move suggests that Chinese manufacturers may have pivoted to a more viable technology earlier on, and that their choice has proven correct over time.

Tesla’s decision is viewed as a strategic step aimed at strengthening its supply chain while gaining advantages in terms of cost and safety.