Elon Musk Likes This EV Battery and It Costs Less—but the U.S. Isn’t Sold on It

A low-cost battery touted by Elon Musk is disrupting the electric-vehicle business in China, grabbing nearly half of the market and spurring the rise of more affordable EVs.

The battery, known as lithium ferrophosphate, or LFP, has low risk of catching fire and costs less to make because it uses iron in place of scarce cobalt and nickel. But it generally offers fewer miles on a single charge and has a tendency to fizzle in cold weather, reasons why it isn’t widely used in the U.S. or Europe.

In China last year, makers of the iron batteries supplied 30.8 gigawatt-hours of energy capacity for vehicles including EVs and gas-electric hybrids, accounting for 47% of the market, according to the government-backed China Automotive Battery Research Institute. That percentage was up from a little more than a quarter the previous year and reflected the arrival of low-cost mass-market EVs using the batteries.

“China leads on the production scale, quality and cost of the current generation of LFP batteries,” said Chao-Yang Wang, a professor and battery expert at Pennsylvania State University.

Mr. Musk, the Tesla Inc. chief, has noticed. Tesla uses LFP batteries in one version of its China-made Model 3 sedans but not in Model 3s made in the U.S. Mr. Musk tweeted in late February that he wanted to use cheaper materials in the cathode, the side of a battery that absorbs electrons when it is generating power.


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