Tesla CEO Elon Musk wants to mass-produce the 4680 battery as soon as possible, making the company’s electric cars cheaper and with higher performance.
But whether it is from building a new battery factory or expanding the battery manufacturing process, Musk faces huge challenges.
Musk wants to make new, cheaper batteries faster. But industry insiders and analysts say Musk is unlikely to meet Tesla’s ambitious goal of mass-producing new batteries this year.
Ever since Musk built Tesla into the world’s most valuable company, it has been known for accomplishing the impossible. But opening a new factory and developing a new way of making batteries could present too many challenges.
The stakes are high for Musk to make a new battery. Prices for battery raw materials such as nickel hit record highs this week. Musk had predicted in January that battery supply would be affected next year, making in-house mass production of batteries key to Tesla’s growth.
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“He’s changing the way batteries are made,” said Shirley Meng, a professor at the University of Chicago who worked with Maxwell, a battery technology company acquired by Tesla. “It’s really, really difficult to produce new batteries at this speed and scale,” she said.
Gene Munster, the managing partner of venture capital firm Loup Ventures, said of the next generation of electric vehicle batteries: “I don’t think the increase in 4680 battery production next year will be enough to meet demand.”
Munster believes that in the long term, It looks like Tesla will achieve its goals, but given its history of producing new models, the start will be slow.
Moreover, mass-producing batteries will be difficult, Musk said, but critical to his goal of making electric vehicles with lower prices and longer ranges. Only in this way can Tesla maintain its market leadership among a growing number of competitors.
Like other automakers, Tesla sources its batteries from suppliers such as Panasonic, CATL, and LG Energy. At the end of 2020, Musk announced that Tesla aims to halve the cost of the most expensive components of electric vehicles by producing its own batteries.
Tesla’s 4680 battery is 46mm in diameter and 80mm long and can store five times the energy of the current 2170 battery. Tesla vehicles can achieve the same level of energy storage and range with a smaller number of new batteries, thereby reducing the cost of the entire vehicle.
Tesla said it will begin delivering Model Y electric cars with 4680 batteries by the end of March this year. In 2020, Musk said that Tesla will be able to produce 100 GWh of 4680 batteries this year, which can be used to make 1.3 million electric vehicles, which is enough to meet the two super factories in Texas and Berlin, Germany. production needs.
Tesla expects to deliver about 1.4 million vehicles this year. Benchmark Mineral Intelligence, a battery supply chain research firm, estimates that about 30,000 Model Y vehicles are expected to be equipped with 4680 batteries, which will increase to 484,000 by 2024.
Double challenge
Tesla faces a lengthy process when expanding its battery factory, made more complicated by the use of a new manufacturing technique called dry electrode coating.
“There’s a fairly lengthy process of fine-tuning the equipment before starting mass production,” said Caspar Rawles, chief data officer at Benchmark Mineral Intelligence, adding that Tesla had to refine its manufacturing process this year, This will ensure mass production of the 4680 battery in 2023.
“Battery production is difficult, even for experienced suppliers,” Rawls said. Tesla said it produced its millionth 4680 battery in January, but did not say how long it took to get there. But Rolls estimates that 1 million batteries will only be enough to produce 1,200 Model Y electric vehicles, suggesting Tesla has a long way to go.
Tesla did not respond to emails about its battery business. Tesla senior vice president Drew Baglino said in January that Tesla’s test cell plant in Fremont, California “is making meaningful progress on its trajectory,” while Battery equipment is being installed at an upcoming battery factory in Texas.
Baglino said Tesla’s “focus is on improving production, quality, and cost-effectiveness to ensure we are ready for larger production volumes this year and next.”
As a signature goal of Tesla, the company hopes to beat traditional battery makers Panasonic and LG by mass production of 4680 cells.
The biggest difficulty facing Tesla is that it is planning to use a dry electrode manufacturing process, the technology it acquired when it acquired California startup Maxwell in 2019. Musk acknowledged that the factory-related equipment “doesn’t exist” and is “in the process of being made.”
The dry electrode manufacturing process bypasses the complex manufacturing steps of traditional lithium batteries, which require cumbersome chemical solutions. If dry electrode technology succeeds in mass production, the resulting batteries will be cheaper and more efficient, but Musk candidly admits that is a challenge.
“The very difficult part is how to scale up production and use batteries to achieve extreme reliability and safety,” he said at the European Battery Conference in November 2020.
Even so, Musk’s plans are considered too optimistic by the industry. Battery manufacturers have spent more than a decade optimizing the traditional manufacturing process for lithium-ion batteries.
A few years ago, Musk said mass-producing the Model 3 electric car was Tesla’s “production hell.” Professor Meng Ying said that Musk may experience a “valley of death” when it comes to scaling up the dry electrode manufacturing process. She added, though, that Tesla will overcome those difficulties.
