The good news is that by using larger cells and a new dry electroplating process, Tesla can cut the cost of the Model Y battery in half, saving more than 8% of the car’s starting price in the United States, said battery experts and relations with company.
The bad news is that it’s only half there, according to 12 experts close to Tesla or familiar with its new technology.
In fact, the dry-embossing technique used to produce Tesla’s larger 4680 battery cells is so new and so little proven that the company has trouble ramping up production to the point where significant cost savings begin. , experts told Reuters.
“They are not ready for mass production,” said one of Tesla’s experts.
Still, the gains Tesla has made by lowering battery production costs over the past two years could help boost profits and extend its lead over many of its rivals in the electric vehicle (EV) space.
Investors see Musk’s promised improvements in battery cost and performance as key to Tesla’s bid to enter an era where it can sell a $25,000 EV profitably — and have a good chance of winning. to achieve its 2030 goals.
Battery systems are the most expensive part of most EVs, so developing low-cost performance packages is key to making affordable electric vehicles that can compete with combustion engine rivals for purchase price. .
Tesla is one of the few major automakers to produce its own EV batteries, and by making the Model Y cells in US factories, the SUV will remain eligible for US tax credits when many competing EVs will no longer be available.
Of the 12 battery experts Reuters spoke to, nine have close ties to Tesla and three of them have looked at new and old Tesla battery technology inside and out through disassembly.
Tesla did not respond to requests for comment.
IT WILL SOLVE THE PROBLEM
Sources predict that Tesla will strive to fully implement the new dry coat manufacturing process before the end of this year, and perhaps not until 2023.
Stan Whittingham, co-inventor of lithium-ion batteries and winner of the 2019 Nobel Prize, says Tesla CEO Elon Musk has been optimistic about the new approach’s time to market.
“I think he will solve the problem, but it won’t be as fast as he wants. It will take time to really test him,” he said.
In August, Musk told shareholders that Tesla will produce a massive 4,680 batteries by the end of 2022.
Experts say Tesla has only been able to reduce the cost of the Model Y battery by $2,000-3,000 so far, about half of the savings Tesla had predicted for the 4680 battery, which it revealed two years ago.
But these savings are mainly due to the design of the new 4680 cells, which are larger than those of Tesla’s current 2170 battery, they said.
But at the heart of the cost-cutting campaign is dry jacket technology, which Musk described as revolutionary but difficult to implement.
Sources say it should provide up to half of the $5,500 in savings that Tesla hopes to achieve, by reducing manufacturing costs and concurrent capital expenditures.
Tesla acquired that knowledge in 2019 when it paid more than $200 million to Maxwell Technologies, a San Diego company that makes supercapacitors, which store energy for devices that need a quick burst of electricity, such as a camera flash.
Using Maxwell’s technology, Tesla began manufacturing 4,680 dry-cell batteries this year, first in tests near its factory in Fremont, California, and more recently at its new world headquarters in Austin, Texas.
This technology allows Tesla to abandon the old, more complicated and more expensive wet coating process. It is expensive because it requires large amounts of electricity, machinery, factory space, time and manpower.
To dilute the electrons, battery manufacturers mix materials with toxic solvents. Once coated, the electrodes are dried in a large oven. Toxic solvents that evaporate during the process are collected, treated and recycled, increasing costs.
With the new technology, the electrodes are coated using different substrates with less liquid consumption, so they do not need to be dried. This means that the process is cheap, fast and also less damaging to the environment.
Due to its simplicity, the process allows Tesla to reduce capital expenditure by one-third and reduce the factory footprint and energy consumption to one-tenth of what would be required for a wet process. said Tesla.
But the company has struggled to sell the process, sources say.
Maxwell developed his own dry coating process for large controllers, but the challenge of coating EV battery electrodes is that they are larger and thicker, making it difficult to coat them with consistent quality at production speeds.
“They can produce in small quantities, but when they started to produce in large quantities, Tesla ended up with many, many rejections,” one of the sources with ties to Tesla told Reuters.
Production yields were so low that any cost savings provided by the new process were lost, the source said.
If all the efficiency gains of dry coating and large cells are realized, the cost of manufacturing the Model Y 4680 battery pack should drop to between $5,000 and $5,500, or about half the cost of the 2170 pack, according to sources.
The rising cost of battery and power supplies, however, threatens this forecast, and Tesla has yet to significantly improve the new battery’s energy density or the amount of power it will deliver.
However, despite these factors, the savings that Tesla is expected to realize will ultimately make the 4680 battery “best in class” in the industry for the foreseeable future, according to one source.
Much of the $2,000-$3,000 savings achieved so far with the 4680 battery has come from other improvements, and using larger cells has proven particularly effective, experts say.
The 4680 cell is 5.5 times larger than the 2170 cell by volume. The old cylindrical cells measure 21 mm in diameter and 70 mm in length, hence their name. Cubicles 4680 have a diameter of 46mm and are 80mm high.
With the old technology, Tesla needs about 4,400 cells to power the Model Y and there are 17,600 points that need to be sold — four for each cell — to create a pack that can be integrated into the car, the sources said.
The 4680 battery pack only needs 830 cells and Tesla has changed the design so that there are two soldering points for each cell, which reduces soldering to 1660 points and provides significant cost savings.
The simple design also means there are fewer connectors and other components, saving Tesla more on labor costs and machine time.
Another source of efficiency was the stronger outer shell of the larger airframe. Tesla can now glue the cells together with glue to create a solid honeycomb-shaped package that attaches directly to the Model Y’s internal body structure.
This eliminates the middle step of arranging the cells into larger modules that fit into a standard battery pack, the sources said.
Using this “cell-to-vehicle” design, Tesla can reduce the weight of a typical 1,200-pound battery pack by 55 pounds or more, a savings of about $500,600 per pack, the Institute said. one of the sources.
But the knowledge of the technique of dry coating remains the holy grail.
“Increasing the battery cell volume has helped greatly to improve efficiency, but aiming to reduce 50% of the overall cell cost is another matter,” the source said.
“It will depend on Tesla’s ability to successfully deploy the dry coating process to the factory.”