Tesla could take batteries from Lishen

23/01/2019

 

Although Tesla has denied that it will use the Chinese Lishen Battery Joint-Stock products for its first cars, the options of the American automaker are few

 

Tianjin Lishen Battery Joint-Stock Co., Ltd. (Lishen Battery) is a high-tech enterprise controlled by state-owned companies and private shareholders and is one of the few companies in the country – reports the Chinese magazine Caijing – which produces exactly types of battery storage units, the 21700 highly powerful cells, of which Tesla needs.

The Guoxuan High-Tech Power Energy of Hefei, which produces cylindrical lithium-ion batteries, has stated that it does not plan to produce 21700 type cells. The BAK Battery of Shenzhen and the Far East First New Energy, however, have started production mass of 21700 in the second half of last year. So there are few options for Tesla.

 

Lishen is one of the only few companies  in the country that mass-produces the exact types of battery storage  units that Tesla needs

 

Reuters reported yesterday that the Palo Alto carmaker signed a preliminary agreement with Lishen to supply batteries for its first overseas factory in Shanghai, in order to reduce its dependence on Japanese Panasonic. Tesla received Lishen’s offer but did not proceed to a contract, he told Caijing.

All this attention on the Tesla battery supplier was born, in particular, because batteries are one of the most crucial parts that determine the price of the NEV; and Tesla needs to lower prices if it wants to expand into the Chinese market. In the company’s US-based projects, the goal is to churn out 500,000 automobiles every year in its factory in China, while last year the company only sold half of it globally.

 

Despite  Tesla’s three price decreases in China late last year, it will still  have to fight for a larger footing in the biggest global NEV market

 

Furthermore, Tesla is not having a great success worldwide and in China has even lowered prices. Last November, the prices of all its models were reduced by 26%. Subsequently, the price of the long-haul 4-wheel drive model was reduced by 7.6 percent to CNY499,000 (USD73,528).

It is also unlikely that the company will make its own batteries from scratch in China. The new Lingang New City plant in Shanghai could only be able to assemble batteries and produce NEVs because of the city’s stringent environmental standards to curb pollution, Caijing said, citing people familiar with the city’s environmental policy.

 

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