High-flying shares of Tesla, Inc. TSLA were gathering further momentum Tuesday. The company is looking to trim costs by negotiating a deal to procure low-cost batteries from Chinese battery maker Contemporary Amperex Technology Co. Limited, according to a Tuesday Reuters report.
Tesla is in advanced stages of talks to buy batteries from CATL that contain no cobalt, the report said.
The elimination of cobalt, one of the most expensive metals used in batteries, could help Telsa trim its battery costs by a double-digit percentage, according to Reuters, which quoted a person directly involved with the matter.
CATL manufactures lithium-iron-phosphate, or LFP, batteries instead of the nickel-cobalt-aluminum or nickel-manganese-cobalt batteries normally used by electric vehicle manufacturers in passenger vehicles, which are critical to increasing efficiency, or the distance a EV can go on a single charge.
The Reuters report also noted that CATL is using cell-to-pack technology to increase the density and safety of its LFP batteries.
Incidentally, CATL confirmed in early February it is teaming up with Tesla to deliver batteries for a two-year period between July 2020 and June 2022.
Tesla began rolling out its domestically made Model 3 vehicles from its Shanghai Gigafactory in December in a bid to avoid shipping costs and tariffs applicable to imported cars.
Tesla shares were trading 5.44% higher to $843.56 at the time of publication Tuesday.
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Photo courtesy of Tesla.
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