Tesla Chinese EV battery supplier Contemporary Amperex Technology (CATL), the world’s largest electric vehicle battery manufacturer, plans to begin mass producing and delivering M3P batteries this year.

M3P batteries will function better than lithium-ion phosphate batteries and have a higher energy density.

According to the company’s chairman Zeng Yu Quan, M3P, which based on a new material technology, will also be less expensive than nickel- and cobalt-based batteries.

The next-generation battery pack technology developed by CATL, which was unveiled in August 2022, would enable an EV to travel 700 km (430 miles) on a single charge.

CATL is the world’s largest battery maker that accounts for more than a third of sales of batteries for electric vehicles (EV) globally. Among of its clients are Tesla, Volkswagen, BMW, and Ford.

When asked on Friday about the potential influence of rival batteries on CATL's market share, Zeng responded that he anticipated them to have more of an effect on second- and third-tier battery manufacturers and that CATL will continue to be the main battery supplier.

In August of last year, CATL scaled back its investment in battery plants in North America because of worry that new U.S. regulations on obtaining battery materials known as the Inflation Reduction Act (IRA) would result in higher costs.

Even if the US government provides subsidies for CATL to develop the factories, the requirements would raise manufacturing batteries in the US to a level where it would be more expensive than exporting them from China.