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Tesla on the cusp of cobalt-free batteries for China, report says

A move to cobalt-free EV batteries could help Tesla make its cars even cheaper in China.

Tesla Model 3 deliveries in China
Less cobalt in batteries isn't just good from a cost perspective, it's good for the environment, too.

Tesla is readying an announcement regarding its first cobalt-free batteries for electric cars, according to a new report from Reuters on Wednesday. The potential imminent reveal comes after months of rumors that Tesla has plans for a new lithium-iron phosphate battery, specifically Chinese Teslas.

Tesla did not immediately respond to Roadshow's request for comment, but sources who spoke to Reuters said an announcement may come as early as Thursday. A pivot from the nickel-manganese-cobalt batteries Tesla currently uses for the Model 3 sedans it builds and sells in China could help it drop production costs further and remain competitive in the world's largest auto market for automobiles. Tesla has consistently juggled price reductions as the state government reduces incentives to purchase electric cars. If it wants to remain competitive with natural prices, it needs to build its cars cheaper.

Leaving out cobalt is a darn good way to accomplish such a goal because the element is seriously expensive. However, it allows automakers and battery makers to pack more energy into a battery pack, which in turn, provides longer driving ranges for owners. It's not clear if this cobalt-free battery will sacrifice driving range in the name of cost, but it's surely something to watch. The fact we've heard rumors this battery will be exclusive to China for now suggests a lower range could be in the cards.

Not only is cobalt an expensive element, it's a controversial one, too. The mining process takes a toll on the environment and serious ethics questions surround the work required to extract cobalt. The Democratic Republic of Congo is often the example critics point to when questioning child labor and other practices. In fact, Tesla was one of numerous companies named in a 2018 lawsuit accusing firms of neglecting child labor in cobalt mines. CEO Elon Musk said that year the automaker will work to reduce its cobalt use to "almost nothing."

The cobalt-free battery could receive a post-Battery Day bounce following other breakthroughs Tesla plans to incorporate into battery manufacturing in the next few years. Specifically, a new "biscuit tin" battery cell allows for more energy-dense batteries at a lower cost. Perhaps the new cell may make up for the lack of cobalt in a future battery pack.

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