A Tesla partner just announced a battery that can last 16 years

Tesla battery supplier CATL says it is ready to produce an electric car battery with a lifespan of 16 years or 1.2 million miles. The breakthrough could lead to significantly cheaper electric cars as batteries are the most expensive component. This confirms the previous reports from Tesla that it would soon be offering a "million-mile battery" in Chinese-made Teslas. CATL says though it doesn't have plans for U.S. manufacturing facilities as yet, it's not out of the question.

Longer lifespan = cheaper warranties — CATL's chairman Zend Yuquin told Bloomberg over the weekend that his company is ready to start fulfilling orders for the long-lasting batteries, which cost about 10 percent more than the average electric car battery. Even though the new battery costs more upfront, the price of an electric car could be driven down significantly because they wouldn't need a battery replacement nearly as often and warranties could cover more miles. Current warranties on EV batteries typically cover only 150,000 miles. Fewer warranty replacements thanks to more reliable batteries could allow Tesla to pass savings passed onto consumers. And that could win it new customers.

Experts in the auto industry say that such a million-mile battery could help Tesla reach the inflection point at which its electric vehicles can be sold at a price comparable to gasoline cars. Tesla's Model 3 is the closest step yet to a mass-market car with a starting price of $38,990 — still a bit more than the $24,400 starting price of the Toyota Camry, though the Model 3 is much cheaper than Tesla's earlier vehicles. Tesla's next cheapest car, the Model Y, has a starting price of $52,990.

New battery tech — While the overall storage capacity of batteries hasn't increased much over the years, Tesla has invested heavily in R&D to improve durability and cost. According to a May report in Reuters, the company has worked with CATL and independent researchers to drive down the cost of its batteries by reducing the use of costly metals like cobalt and by developing recycling supply chains to reuse discarded material, among other advances. It is also changing the chemical composition and coating to make the batteries survive longer under stress.

Tesla has been trying to reduce its reliance on longtime battery partner Panasonic, and Tesla CEO Elon Musk believes more durable batteries could double as storage for the energy grid, yet another way prices could come down. With the company set to open a new factory in Texas soon and car sales climbing as people eschew public transport because of the ongoing pandemic, a revolutionary battery could turn out to be very good for Tesla indeed.