Inside Tesla’s drive to maintain Musk’s battery promise By Reuters

By Norihiko Shirouzu and Paul Lienert

(Reuters) – The key behind Elon Musk’s aim of promoting 20 million Tesla (NASDAQ:)’s a yr by 2030 lies in its pioneering battery know-how.

The excellent news is that through the use of greater cells and a brand new course of to dry-coat electrodes, Tesla may halve the price of a Mannequin Y battery, saving greater than 8% of the automobile’s U.S. beginning value, battery specialists with ties to the corporate stated.

The unhealthy information is that it is solely midway there, in line with 12 specialists near Tesla or accustomed to its new know-how.

That is as a result of the dry-coating method used to supply the larger cells in Tesla’s 4680 battery is so new and unproven the corporate is having bother scaling up manufacturing to the purpose the place the large price financial savings kick in, the specialists instructed Reuters.

“They only aren’t prepared for mass manufacturing,” stated one of many specialists near Tesla.

Nonetheless, the features Tesla has already made in reducing battery manufacturing prices prior to now two years may assist increase earnings and prolong its lead over most electrical car (EV) rivals.

Musk’s promised enhancements in battery price and efficiency are seen by traders as essential to Tesla’s quest to usher in an period the place it may promote a $25,000 EV for a revenue – and stand a greater likelihood of hitting its 2030 targets.

Battery methods are the costliest single ingredient in most EVs, so making lower-cost, high-performance packs is essential to producing inexpensive electrical automobiles that may go toe to toe with combustion-engine rivals on sticker costs.

Tesla is one in all solely a handful of main automakers that produce their very own EV batteries and by manufacturing Mannequin Y cells at U.S. vegetation, the SUV will stay eligible for U.S. tax credit when many rival EVs might not qualify.

Among the many 12 battery specialists Reuters spoke with, 9 have shut ties to Tesla and three of the 9 have examined Tesla’s new and outdated battery know-how inside and outside by way of teardowns.

Tesla didn’t reply to requests for remark.

‘HE WILL SOLVE IT’

The sources predict that Tesla will discover it troublesome to totally implement the brand new dry-coating manufacturing course of earlier than the top of this yr, and maybe not till 2023.

Stan Whittingham, a co-inventor of lithium-ion batteries and a 2019 Nobel laureate, believes Tesla Chief Govt Elon Musk has been overly optimistic on the timeframe for commercializing the brand new method.

“I feel he’ll resolve it, nevertheless it will not be as fast as he likes. It will take a while to actually take a look at it,” he stated.

In August, Musk instructed shareholders Tesla could be producing excessive volumes of 4680 batteries by the top of 2022.

In line with the specialists, Tesla has solely been in a position to reduce the Mannequin Y’s battery price by between $2,000 and $3,000 up to now, about half the financial savings Tesla had deliberate for the 4680 battery, which it unveiled two years in the past.

However these financial savings have come primarily from the design of the brand new 4680 cells, that are greater than these in Tesla’s present 2170 battery, they stated.

However the coronary heart of the drive to push down prices is the dry-coating know-how, which Musk has described as revolutionary however troublesome to execute.

In line with the sources, it ought to ship as a lot as half of the $5,500 price financial savings Tesla hopes to realize, by slashing manufacturing prices and one-time capital spending.

Tesla acquired the know-how in 2019 when it paid over $200 million for Maxwell Applied sciences, an organization in San Diego making ultracapacitors, which retailer power for gadgets that want fast bursts of electrical energy, resembling digicam flashes.

Constructing on Maxwell’s know-how, Tesla started making 4680 dry cells this yr, first in a pilot close to its Fremont, California plant and extra lately at its new world headquarters in Austin, Texas.

‘ BEST (NYSE:) IN CLASS’

The know-how permits Tesla to ditch the older, extra complicated and expensive wet-coating course of. It is costly as a result of it wants a considerable quantity of electrical energy, equipment, manufacturing unit house, time, and a big labour drive.

To coat electrodes within the moist course of, battery producers combine the supplies with poisonous binder solvents. As soon as coated, the electrodes are dried in large ovens, with the poisonous solvents that evaporate within the course of being recovered, handled and recycled – all including to the fee.

With the brand new know-how, electrodes are coated utilizing totally different binders with little use of liquids, so they do not should be dried. Which means it is cheaper, quicker and likewise much less environmentally damaging.

Due to its simplicity, the method permits Tesla to chop capital spending by a 3rd and slash each the footprint of a manufacturing unit and its power consumption to a tenth of what could be wanted for the moist course of, Tesla has stated.

However the firm has had bother commercializing the method, the sources stated.

Maxwell developed its dry-coat course of for ultracapacitors, however the problem with coating electrodes for EV batteries is that they’re much bigger and thicker, which makes it arduous to coat them with constant high quality at mass-production speeds.

“They’ll produce in small quantity, however once they began massive quantity manufacturing, Tesla ended up with many rejects, too many,” one of many sources with ties to Tesla instructed Reuters.

Manufacturing yields have been so low that every one the anticipated price financial savings from the brand new course of have been misplaced, the supply stated.

If all of the potential efficiencies from dry-coating and the larger cells are realised, the manufacturing price for the Mannequin Y’s 4680 battery pack ought to fall to $5,000 to $5,500 – roughly half the price of the 2170 pack, in line with the sources.

The rising price of battery supplies and power pose a danger to these forecasts, nevertheless, and Tesla has not but been in a position to considerably enhance the brand new battery’s power density or the quantity of energy it packs, as Musk has promised.

Nonetheless, regardless of these elements, the financial savings Tesla is predicted to realize will find yourself making the 4680 battery the trade’s “greatest at school” for the foreseeable future, one supply stated.

BULKING UP

A lot of the $2,000 to $3,000 price financial savings achieved with the 4680 battery up to now has come from different enhancements, and utilizing greater cells has confirmed notably potent, the specialists stated.

The 4680 cells are 5.5 instances the scale of the 2170 cells by quantity. The older cylindrical cells measure 21mm in diameter and 70mm in top, therefore the identify. The 4680 cells have a 46mm diameter and are 80mm excessive.

With the older know-how, Tesla wants about 4,400 cells to energy the Mannequin Y and there are 17,600 factors that should be welded – 4 per cell – to create a pack that may be built-in into the automobile, the sources stated.

The 4680 battery pack solely wants 830 cells and Tesla has modified the design in order that there are solely two weld factors per cell, slashing the welding to 1,660 factors and resulting in important price financial savings.

The easier design additionally means there are fewer connectors and different parts, which has allowed Tesla to save lots of additional on labour prices and machine time.

One other supply of effectivity has been the bigger cell’s far sturdier outer case. Tesla can now bond the cells along with adhesive right into a inflexible honeycomb-like pack which is then related on to the inside physique construction of the Mannequin Y.

This eliminates the intermediate step of bundling cells into bigger modules that are then put in in a standard battery pack, the sources stated.

By shifting to this “cell to car” design, Tesla can scale back the burden of a standard 1,200-pound battery pack by 55 kilos or extra – saving about $500 to $600 per pack, one of many sources stated.

However mastering the dry-coating method stays the holy grail.

“Bulking up the battery cell helped lots in boosting effectivity, however pushing for 50% price financial savings for the cell as an entire is one other matter,” one supply stated.

“That can depend upon whether or not Tesla can deploy the dry-coating course of efficiently in a manufacturing unit.”