Strong demand for the Tesla Model Y prompts Musk to consider using competitors' batteries for European models

According to sources relayed by TeslaMag.de , the Tesla Gigafactory in Berlin will soon produce the Tesla Model Y Rear-wheel drive (or RWD ) for the European market. These vehicles will be equipped with BYD batteries . This European manufacturing will replace the current Chinese import of Tesla Model Y RWDs, which use approximately 60 kWh LFP batteries supplied by the manufacturer CATL.

At present, the German Tesla factory only produces the most expensive Model Ys, which are equipped with two motors, namely the Model Y Long Range and the Model Y Performance . This collaboration between Tesla and BYD aims to strengthen Tesla's supply chain and reduce notoriously long delivery times.

Tesla will exclusively use BYD's Blade batteries , which are LFP type , for the base version of the rear-wheel-drive Model Y only. Like Tesla's batteries, BYD's will play a crucial structural role in the car's chassis.

It is possible that adapting these batteries to the Model Y manufacturing process took more than a year, explaining the delay between the announcement of the collaboration between BYD and Tesla and today.

A smaller battery... to reduce costs?

The capacity of BYD's new battery for rear-wheel-drive Tesla Model Ys imported from China is slightly lower than the CATL batteries currently in use, around 55 kWh compared to 60 kWh for Shanghai-made models in recent months. As a result, the range could decrease from 455 km to 440 km (WLTP).

However, the switch in production between Tesla's factories is not instantaneous, so the two models could co-exist for some time before production is fully transferred to another factory, as has already happened with the Model. Y Great Autonomy.

It's worth remembering that the Berlin factory started out producing the Model Y Performance, but Tesla then quietly added the Model Y Great Autonomy to its production lines. Customers discovered that their car was " Made in Germany " by checking their VIN number.

It remains to be seen, however, how the new battery will affect the price of the base Model Y, which is currently priced from €45,990 . In theory, the new battery, which is smaller than the current CATL battery and therefore cheaper, might not result in a price increase, which would increase Tesla's profit margin.

For the brand, the price of the access version is crucial, as the Model Y RWD is largely responsible for the Model Y being the best-selling car in Europe in the first quarter of 2023.

Furthermore, the fact that Tesla uses batteries from BYD has considerable symbolic and commercial significance. As a benchmark electric car brand, Tesla's choice to source from the world's second-largest battery maker demonstrates BYD's far-reaching influence across the vehicle supply chain electrical.

Unlike CATL, BYD is a vertically integrated company that covers all aspects of electric car production, from lithium mining and battery manufacturing to producing software and ADAS systems for its vehicles. Ultimately, this speaks to BYD's power in the electric vehicle industry.