Electric car maker Tesla plans to introduce a new low-cost, long-life battery in its Model 3 sedan in China later this year or early next that it expects will bring the cost of electric vehicles in line with petrol models, and allow EV batteries to have second and third lives in the electric power grid.

New, low-cost batteries designed to last for a million miles of use and enable electric Teslas to sell profitably for the same price or less than a petrol vehicle are just part of Musk’s agenda, people familiar with the plans told Reuters.

For months, Tesla CEO Elon Musk has been teasing investors, and rivals, with promises to reveal significant advances in battery technology

With a global fleet of more than a million electric vehicles that are capable of connecting to and sharing power with the grid, Tesla’s goal is to achieve the status of a power company, competing with such traditional energy providers as Pacific Gas Electric and Tokyo Electric Power, those sources said.

Reuters/Aly Song

Tesla is working on recycling and recovery of such expensive metals as nickel, cobalt and lithium, through its Redwood Materials affiliate, as well as new “second life” applications of electric vehicle batteries in grid storage systems, such as the one Tesla built in South Australia in 2017.

We’ve got to really make sure we get a very steep ramp in battery production and continue to improve the cost per kilowatt-hour of the batteries

The sources said CATL also plans to supply Tesla in China next year with an improved long-life nickel-manganese-cobalt (NMC) battery whose cathode is 50% nickel and only 20% cobalt.