Canaccord Genuity analyst Jed Dorsheimer recently noted that Tesla has shifted to cobalt-free lithium iron phosphate (LFP) batteries for its flagship energy storage product, the Megapack. Such a change may seem minor, but the advantages presented by LFP batteries for the Megapack are notable, so much so that it may very well trigger an energy storage revolution of sorts.
“Tesla announced that Megapack will be using LFP cathode batteries, similar to the entry-level Made-in-China Model 3/Ys. This is significant, as Tesla ramps up their grid-scale energy storage product without drawing further on an already supply-constrained nickel-based battery production capacity used in 2170s,” the analyst wrote.
It took Tesla some time before it decided to use LFP batteries for its vehicles. LFP batteries are typically cheaper to produce, and the fact that they use no cobalt makes them one of the least controversial batteries on the market. However, LFP batteries also tend to be less energy-dense than the nickel-manganese-cobalt (NMC) cells used by Tesla in its flagship electric vehicles.
This is part of the reason why only selected vehicles like the Made-in-China Model 3 Standard Range Plus are equipped with LFP batteries. The car, after all, is optimized for cost and practicality, not performance. Nevertheless, this is a factor that is no issue for the Megapack, as energy storage units are not subjected to the same strains as those experienced by the batteries used in Tesla’s high-performance electric vehicles.