Reports from China show that Tesla is laying off half of the workers on the battery pack assembly line at Giga Shanghai. The move may have been triggered by a change in production strategy, as Tesla will rely more on suppliers to provide complete battery packs instead of just battery cells. The move reflects the cost-cutting measures Tesla made in preparation for the refreshed Model 3 production start.
Tesla will soon start production of the refreshed Model 3 (Project Highland) at Giga Shanghai and is making significant changes to the production lines. Probably the most drastic change affects the Phase 1 battery line, where half the employee have been notified about layoffs. Tesla recently stopped production at the Phase 1 battery line, which was the first battery production facility at Giga Shanghai.
Tesla operates two other production lines at Giga Shanghai, Phase 2 and Phase 2.2, with the latter set to replace the aging Phase 1. The closing of the Phase 1 battery line reflects the low level of automation and limited production capacity. Tesla expects the state-of-the-art Phase 2.2 to take over and surpass Phase 1 production. Phase 2 alone has a production capacity of 3,400 battery packs per day, more than enough for the current production levels.
Tesla will also rely more on third-party suppliers to provide complete battery packs instead of just individual cells. This would make battery production lines obsolete as Tesla changes the production strategy for the refreshed Model 3. Tesla's supplier CATL is setting up a battery factory outside Giga Shanghai and will provide complete CTP structural battery packs to Tesla for use in the Project Highland Model 3.
Chinese media reports indicated that CATL would supply the newer M3P chemistry to Tesla, an advanced LMFP cell formula. In the M3P cells, the iron is enriched with a mix of materials that include magnesium, zinc, and aluminum. This gives the new cells a higher energy density than LMFP cells and a longer lifecycle. The price is still lower than the corresponding NMC cells, offering the best of both worlds, as CATL said when they announced the M3P cells last year.
According to previous reports, Tesla will use CATL's M3P batteries for the refreshed Model 3 RWD variant. The battery capacity increases by 10 percent, from 60 to 66 kWh. These battery packs could also be used for Model Y RWD production in the future. The switch to new battery chemistry requires a significant change in the battery management system (BMS) design, which explains why Tesla prefers to do it during the model switch window. It's also a good reason why the EV maker let CATL supply the entire pack, as the Chinese company knows best what its new cells need.
Tesla operates two other production lines at Giga Shanghai, Phase 2 and Phase 2.2, with the latter set to replace the aging Phase 1. The closing of the Phase 1 battery line reflects the low level of automation and limited production capacity. Tesla expects the state-of-the-art Phase 2.2 to take over and surpass Phase 1 production. Phase 2 alone has a production capacity of 3,400 battery packs per day, more than enough for the current production levels.
Tesla will also rely more on third-party suppliers to provide complete battery packs instead of just individual cells. This would make battery production lines obsolete as Tesla changes the production strategy for the refreshed Model 3. Tesla's supplier CATL is setting up a battery factory outside Giga Shanghai and will provide complete CTP structural battery packs to Tesla for use in the Project Highland Model 3.
Chinese media reports indicated that CATL would supply the newer M3P chemistry to Tesla, an advanced LMFP cell formula. In the M3P cells, the iron is enriched with a mix of materials that include magnesium, zinc, and aluminum. This gives the new cells a higher energy density than LMFP cells and a longer lifecycle. The price is still lower than the corresponding NMC cells, offering the best of both worlds, as CATL said when they announced the M3P cells last year.
According to previous reports, Tesla will use CATL's M3P batteries for the refreshed Model 3 RWD variant. The battery capacity increases by 10 percent, from 60 to 66 kWh. These battery packs could also be used for Model Y RWD production in the future. The switch to new battery chemistry requires a significant change in the battery management system (BMS) design, which explains why Tesla prefers to do it during the model switch window. It's also a good reason why the EV maker let CATL supply the entire pack, as the Chinese company knows best what its new cells need.