How Tesla plans to make batteries cheap enough for a $25,000 car

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Tesla’s enterprise mannequin is dependent upon steady enhancements in the price and power density of batteries. When Tesla was based in 2003, it was barely doable to construct a battery-powered sports activities automotive with a six-figure price ticket. Over the following 15 years, cheaper and extra highly effective batteries enabled Tesla to construct roomier automobiles with longer ranges at decrease costs.

Tesla expects that progress to proceed—and possibly even speed up—within the subsequent few years. And it is not ready for different corporations to provide you with higher battery designs. In recent times, Tesla has had a big group of engineers re-thinking each facet of Tesla’s batteries, from the chemistry contained in the cells to the best way the batteries are integrated into automobiles.

At a much-touted Tuesday occasion, Tesla pulled again the curtain on a collection of enhancements the corporate hopes to roll out within the subsequent three years. In whole, Tesla says that every one of those improvements put collectively will allow a 56-percent discount within the per-kWh price of its batteries.

Consequently, Elon Musk mentioned, Tesla will be capable to understand a longstanding dream: a very reasonably priced electrical automotive.

“We’re assured that long-term we will design and manufacture a compelling $25,000 electrical automobile,” Musk mentioned. He added that this is able to occur “most likely about three years from now.” Tesla did not present a reputation or different particulars about this deliberate low-cost Tesla.

This being Elon Musk, it is price taking the timeline with a grain of salt. And as a forthcoming deep dive by Ars Technica’s Scott Johnson will clarify, a few of Tesla’s supposed breakthroughs—particularly with respect to cell chemistry—are price viewing with skepticism.

Whereas a 56-percent discount in battery prices over three years would possibly seem to be an enormous enchancment—and it could be—it could characterize a tempo of progress solely modestly sooner than what the broader battery trade has loved in recent times. For instance, analysis agency BloombergNEF estimates that the market value of a 1 kWh battery pack fell from $1,160 in 2010 to $153 in 2019. That represents a nearly eight-fold decline in nine years—or a halving of battery prices each three years.

Nonetheless, Tesla is probably uniquely well-positioned to capitalize on the falling price of batteries. It has a powerful model and unmatched infrastructure—together with its SuperCharger community—to make electrical automobiles mainstream. So if Tesla can ship on the improvements it unveiled on Tuesday, it should have a shiny future.

Tesla’s secret weapon: Vertical integration


Tesla designs and builds extra of its personal components than most automotive corporations. Consequently, Tesla can search for price financial savings and efficiency enhancements at each stage of its provide chain. It will possibly optimize the smallest particulars of particular person parts in addition to tinker with the general design of a automobile. And it might optimize parts for the particular wants of its personal merchandise.

That focus to element was evident in Tuesday’s battery presentation. Tesla’s projected 56-percent discount in battery prices cannot be attributed to any single technological breakthrough. Reasonably, it is the cumulative results of enhancements in battery chemistry, cell design, cell manufacturing course of, and the best way batteries are integrated into automobiles.

Previously, the majority of Tesla’s batteries had been constructed round battery cells manufactured by Panasonic on the Gigafactory, the Nevada battery manufacturing facility collectively developed by the 2 corporations.

Tesla says that it plans to proceed working with Panasonic and different cell suppliers, however it should want so many batteries within the coming years that the corporate may even begin producing its personal cells. Tesla estimates that it’ll produce 100GWh of its personal cells in 2022 and an enormous 3,000GWh by 2030. (Throughout the presentation, a Tesla slide confirmed the Nevada Gigafactory with a capability of 150 GWh in 2018, however Tesla’s website states that “in mid-2018, battery manufacturing at Gigafactory 1 reached an annualized price of roughly 20 GWh.” I am undecided find out how to reconcile these statements.)

Tesla has formidable plans for its new battery cells. They’ll use totally different battery chemistries, together with one which eliminates using costly cobalt in favor of nickel.

However Tesla additionally expects to reap double-digit price financial savings from extra prosaic enhancements to its manufacturing course of. Drew Baglino, Tesla’s vp for power engineering, pointed to the bottling trade, the place comfortable drink makers maximize throughput by maintaining bottles consistently in movement, as a mannequin.

“Along with our inside design group that makes this gear and designs this gear, we coupled enthusiastic about find out how to make one of the best cell with enthusiastic about find out how to make one of the best gear in order that we might accomplish the quickest parts-per-minute charges on all of those instruments,” mentioned Baglino.

Baglino argued that vertical integration with the groups designing the machines is essential to attaining greater throughput as a result of “we do not have all these edge circumstances between one piece of kit and one other. We are able to design all the machine to be one machine and take away all these pointless steps.” The consequence: a seven-fold enchancment in cell manufacturing throughput.

Tabless cells and lithium mining

Tesla has developed vast facilities for "formation," the stage where a completed cell is charged for the first time and tested for quality. Each of these cabinets has slots to charge and test dozens of cells. Robots load and unload the cabinets.
Enlarge / Tesla has developed huge services for “formation,” the stage the place a accomplished cell is charged for the primary time and examined for high quality. Every of those cupboards has slots to cost and take a look at dozens of cells. Robots load and unload the cupboards.


For instance, in a cylindrical battery, the cathode and anode are wound tightly round each other. In a standard battery, a “tab” stands out of every aspect of this roll—one connecting the coiled cathode sheet to 1 finish of the cell, the opposite connecting the anode to the alternative finish. Tesla says it has pioneered a brand new “tabless” inside construction that’s not solely much less liable to overheating, however can be simpler to fabricate. Eliminating the tabs means there’s much less want to begin and cease the manufacturing course of to verify the tabs are correctly positioned in every coil.

Tesla says it’s even planning to get into the mining enterprise. At the moment, lithium mining overwhelmingly happens outdoors america. However Musk says that is not as a result of there is a scarcity of lithium within the US. Certainly, he argued, lithium is plentiful around the globe; there’s sufficient lithium within the floor in Nevada alone to switch all the US automobile fleet with battery-electric automobiles. So Tesla is planning to begin its personal lithium mining operation in Nevada with a brand new, Tesla-developed mining course of.

“We really purchased rights to a lithium clay deposit in Nevada—over 10,000 acres,” Musk mentioned. “The character of the mining may be very environmentally delicate in that we take a piece of grime out of the bottom, take away the lithium, after which put the chunk of grime again the place it was.”


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