Due to the lower cost of CATL's M3P batteries, both Model 3 and Model Y have room for price reduction after using the new packs, according to local media.

(Image credit: CnEVPost)

Tesla will soon launch a new China-made Model 3, the biggest highlight of which is that the entire lineup will use M3P batteries provided by CATL, with range improvements of at least 10 percent, Sina Tech said today, citing two people familiar with the matter.

The current Model 3 sedans produced at Tesla Giga Shanghai are powered by CATL's lithium iron phosphate (LFP) batteries with CLTC ranges of 556 km to 675 km, respectively. With the new battery packs, their ranges are expected to exceed 600 km and 700 km, the report said.

On August 3, LatePost reported that CATL will begin supplying Tesla with M3P batteries in the fourth quarter on Model Y vehicles using 72-kWh packs, which will be available early next year.

Both the Model 3 and Model Y have room for price reductions with the new packs due to the lower cost of CATL's M3P batteries, said the Sina Tech report today.

Because CATL's M3P batteries cost less, both the Model 3 and Model Y have room to drop in price with the new packs, the report said.

A Tesla China source said the news is a "rumor" and does not match the facts, according to Caijing's report.

CATL previously said its M3P batteries have an energy density improvement of about 15 percent over LFP batteries, up to 210 Wh/kg, and cost as much as LFP batteries and less than ternary lithium batteries.

In a presentation at the 2022 World EV & ES Battery Conference on July 22, CATL Chief Scientist Wu Kai said the M3P battery will primarily target the market with a range of more than 700 kilometers.

CATL's M3P batteries are already in mass production and will be in use next year, Wu said at the time.

This battery pack will use M3P cells as well as Qilin Battery's pack structure, resulting in a longer range, according to Wu.

On June 23, CATL unveiled CTP (cell to pack) 3.0 Qilin Battery, which is an innovation in battery pack structure without involving chemistry.

The Qilin Battery allows volume utilization to exceed 72 percent, setting a new record as the highest integrated battery in the world today, CATL said at the time.

The battery can reach an energy density of 255 Wh/kg, easily allowing the vehicle to achieve a range of 1,000 kilometers, CATL said, adding that it will be in mass production by 2023.

In today's report, Sina Tech also said that Tesla has no plans to use BYD batteries in vehicles produced at Giga Shanghai.

On August 10, Sina Tech said that BYD's blade batteries supplied to Tesla have started to be delivered to the latter's plant in Berlin, Germany, which is also the first Tesla plant to use BYD's batteries.

The first Tesla vehicles with BYD blade batteries are expected to roll off the assembly line within one month at the earliest, that is, from late August to early September, according to the report.

Tesla shortens wait times for all available models in China