The U.S. electric vehicle giant Tesla is planning to launch a new variant of the Model 3 sedan in China, according to a new rumor.

Sina Finance reported that Tesla would replace the NMC component of the Tesla Model 3 battery with LFP. This particular compound has been the center of interest among vehicle manufacturers. Most of these vehicle makers believe that the LFP could provide a myriad of improvements compared to its predecessor while minimizing the cost of sourcing for the expensive Cobalt.

It is worth mentioning that the battery of Tesla Model 3 is made up of two major parts. These are the cathode and the anode. These parts facilitate the flow of electrons on the powertrain of the vehicle and its systems. Additionally, they deliver the power for the Model 3 using its electronics. 

The report cited two people familiar with the matter as the source of this latest information. According to the report, these sources claim that all the standard Tesla Model 3 in China will switch from NMC to LFP. With the removal of Cobalt, Tesla would be able to decrease its vehicles' price, which is crucial to gain market in China.

Unlike in other regions, Tesla's competitors in China offer their electric vehicles, even bigger in sizes, at much lower prices. Although Tesla is one of the recipients of China's subsidies, it seems that it could not effectively make use of these subsidies because of its pricier vehicles.

A few days ago, Tesla detailed some of its plans for its battery manufacturing during its Battery Day. Tesla CEO Elon Musk unveiled the new 4680 tabless battery cell that would soon power most of its vehicles. Interestingly, new and unverified reports claim that this new pack are cobalt-free and utilize lithium-iron-phosphate (LFP) instead of NMC or nickel-manganese-cobalt.

The report also claimed that Tesla would source the new batteries externally despite rumors that it is planning to produce the batteries in-house. China's Contemporary Amperex Technology Co. Limited will supply the new batteries for Tesla. It is one of Tesla's existing battery suppliers and it appears that the U.S. electric vehicle maker will stay reliant on it.

The latest news on Tesla's plan to switch to LFP for its Model 3 vehicles in China is not really new. In May, Tesla filed a request to the Chinese Ministry of Industry and Information Technology for the new Model 3 sedan. At that time, Tesla was rumored to be in talks with LG Chem for its battery supply.