Tesla Inc (TSLA)

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This should be good for Tesla?

How low could LFP costs go?

There are countless ways cost reduction can be achieved within gigafactories, ranging from procurement, cell design and local price reductions. Here we explore 3 of them: a reduction in cathode active material (CAM) price due to LFP oversupply, halving of electricity/gas pricing due to local subsidies, and halving the workers required via increased factory optimisation.

Procuring cost-effective CAM is critical to reducing the cost of the cell. In the base case LFP CAM price is $8.5/kg, reducing to $6.2/kg in the optimised case, resulting in savings of almost $5/kWh. Short-term savings to this extent are feasible due to the oversupply of Chinese LFP which suppliers have been attempting to offload at severely discounted prices.

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