The rumors about Tesla using BYD's flagship Blade Batteries (long cells, LFP chemistry) are back, but interestingly they are related to Europe.
According to Sina Tech (via CnEVPost), BYD has already started supplying Tesla with its Blade Batteries. The unofficial sources familiar with the matter point out the Tesla Giga Berlin-Brandenburg plant in Grünheide in Germany as the destination.
The article says that by having BYD batteries in Germany, Tesla might start production of the LFP-powered Tesla Model Y in a matter of weeks - in August or September.
Currently, as far as we know, the company produces in Germany only vehicles equipped with 2170-type cylindrical battery cells (from LG Energy Solution's Chinese plant). At the same time, the factory is envisioned to locally produce and use 4680-type cylindrical battery cells and structural battery packs (at some point in the future).
If the rumor is true, it would mean that Tesla intends to launch an entry-level Tesla Model Y with LFP batteries.
So far, LFP batteries for Tesla cars produced in China and in California were supplied by CATL.
Interestingly, the latest report specifically notes that BYD batteries will not be supplied to the Tesla Giga Shanghai plant. It might be reasonable because the form factors of CATL and BYD battery cells are vastly different, so it would require two different pack manufacturing lines.
Anyway, the Chinese media notes that it's difficult to get any confirmation from BYD or Tesla. There were multiple rumors in the past, including input from Lian Yubo, BYD's executive vice president, who reportedly said that BYD is preparing to supply batteries to Tesla "very soon." But CnEVPost reports that the video of that interview was subsequently deleted.
There were more rumors indicating a supply agreement in June, but nothing really official. If the partnership is true, we might soon see the results and it will be the ultimate confirmation.
A deal with BYD, related to the gigafactory in Germany, would also prove that Tesla is a battery cell agnostic - probably using more types (form factors and chemistries) than other EV manufacturers. Of course, the company is pursuing its in-house 4680-type cells, but also has to satisfy the current demand for batteries.
