Tesla Inc has potentially stirred up the battery metals mining sector with reports that it may adopt a cobalt-free system for certain models in China.
The electric vehicle firm is, according to a Reuters report, in advanced stages of talks with CATL to use lithium iron phosphate (LFP) batteries in a manufacturing facility.
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Cobalt is the most expensive so-called ‘battery metal’ and the Reuters report suggests that Tesla is seeking to reduce manufacturing costs amid an apparent slowing of electric vehicle sales in China.
Talks have been taking place for over a year and the LFP batteries would be cheaper by a “double digit percent”, claim Reuters – citing someone ‘directly involved in the matter, but not authorised to speak to the media’.
The report comes as the commodities market awaits news on Tesla’s future plans for its battery technologies, after Elon Musk last month mooted an industry event potentially taking place in April.
In early New York trade on Tuesday, Tesla shares were 6.3% higher at $850.70.
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