Core Viewpoint - Tesla is set to launch its first lithium iron phosphate (LFP) battery factory in Delaware, USA, as part of its strategy to reduce costs and support the rapid growth of its energy storage business [2][4]. Group 1: Tesla's Battery Factory - The factory is expected to have an initial capacity of 10 GWh, primarily serving energy storage and certain vehicle models, with equipment supplied by CATL [3]. - Tesla has been a significant customer of CATL, purchasing lithium batteries worth 13 billion yuan in 2021, which accounted for 10% of CATL's total revenue, and 38 billion yuan in 2022, making up 11.59% of total revenue [3]. Group 2: Industry Developments - The U.S. LFP battery industry is experiencing rapid advancements, with LGES in Michigan completing two production lines for LFP batteries and starting mass production [6]. - Ford is also progressing with its LFP battery factory, which is set to begin equipment installation and aims for production next year [6]. - General Motors has requested LGES and SDI to add LFP battery production lines to their joint battery factories in the U.S. [7]. Group 3: Cost and Competitive Advantage - The cost of batteries constitutes about 50% of vehicle production costs, and as subsidies decline, the price advantage of electric vehicles over gasoline vehicles is diminishing [7]. - LFP batteries are significantly cheaper than ternary lithium batteries, and Tesla's move to self-produce these batteries could enhance its price competitiveness and potentially drive innovation and cost competition across the industry [7].