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Tesla Faces Regulatory Pressure In China Over Product Safety

BY LEVI JOHNSON

Elon Musk’s Tesla Inc is presently facing a regulatory pressure challenge in China over its product safety.

The regulatory pressure onTesla emerged after consumer disputes over product safety and scrutiny over how it handles data.

The reason is oweing to Tesla present batteries usage from China’s Contemporary Amperex Technology Co (300750.SZ) (CATL) and South Korea’s LG Chem (051910.KS) for its China-made Model 3 and Model Y cars.

According to Reuters, CATL has been the sole supplier of the LFP batteries for China-made Model 3 cars with standard driving ranges since late last year.

Three sources told Reuters that right now, Tesla has been working closely with EVE to get its batteries to meet its requirements, as it aims to bring in the supplier.

One of the sources said Tesla could start using EVE’s LFP batteries in the China-made Model 3 and Model Y vehicles within the next six months and EVE had ramped up production in order to be prepared for the possible partnership.
Tesla Inc (TSLA.O) is having this business talks with Chinese battery maker EVE Energy Co (300014.SZ) to add the firm to its Shanghai factory supply chain. It was gathered that the initiative would boost procurement of lower-cost batteries.
EVE makes lithium iron phosphate (LFP) batteries, which are cheaper to produce because they use iron instead of more expensive nickel and cobalt.

But LFP batteries generally offer a shorter range on a single charge than the more popular nickel/cobalt alternative.

EVE would become the second supplier of LFP batteries to Tesla after China’s Contemporary Amperex Technology Co (300750.SZ) (CATL).

The talks are advanced and the Palo Alto, California-based company is seeking to finalise the partnership in the third quarter, said two of the people.

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