Five years ago, Tesla’s collaboration with Panasonic in building its massive Nevada Gigafactory was widely seen as somewhere between an overcommitment and a full-on boondoggle.
The Gigafactory has already proven to be one of the smartest decisions made by Tesla. It assured control over its electric-car battery cell supply, as it ramped up the Model 3 sedan and then Model Y crossover, and helped isolate Tesla from the cell supply issues that have plagued other EV makers.
On Tuesday, Tesla announced a new kind of leap ahead. It plans to produce 100 gigawatt-hours of its new cells by 2022, and 3 terawatt-hours (3,000 gwh) by 2030—numbers that now put the 35-gwh output of Gigafactory 1 in perspective. Furthermore, supplying other automakers with Tesla cells is a long-term possibility.
As CEO Elon Musk had prefaced on Monday, the company will continue to increase its battery cell purchases from Panasonic, LG, CATL, and possibly other partners supplemental to that ramp-up of Tesla’s own cells—all on the way to what Musk sees as a long-range global target of about 20 million cars per year.
Tesla Battery Day vertical integration overview
However the new cells—conspicuously absent in physical form as they were at Battery Day—are positioned to be a game-changer. Tesla sums that they could result in a 54% boost to energy density and range, a 56% reduction in cost per kwh at the pack level, and a 69% reduction in overall investment per kwh.
Based on the timing, the gains in energy density, previous hints from Musk, the cells are likely to be installed in the Semi, the Roadster, and possibly the Cybertruck.
Part of the reason Tesla saw the need to go it alone in reconceiving its cells was that even as its products reached greater scale, the battery cost curve was leveling and not improving quickly enough. As Musk and Drew Baglino, senior VP for powertrain and engineering, explained in their Battery Day presentation, it also saw a future in which battery factories, even at 150 gwh each, couldn’t scale up quickly enough to meet anticipated global demand.
Battery Day. - Current Gigafactory scale not sustainable
Musk called the series of decisions surrounding the new cells as enabling “a new trajectory in the reduction of cell costs,” with differences that the company can start to realize in about 18 months and in fuller effect about three years out.
One of those decisions involved focusing on a new larger-format cylindrical cell. Tesla considered that as it made cells larger, high-speed charging and thermal issues become more challenging. But it found a sweet spot at the 4680 format—or 46 mm wide by 80 mm long, versus 21 mm by 70 mm for the Model 3 and Model Y—with a shingled spiral material and tabless structure permitting a shorter electron path and easier manufacturing.
Cross-section of future Tesla cell
Tesla says that the 4680 cells offer a better power-to-weight ratio than smaller cells. Each one packs five times the energy and six times the power of Tesla’s smaller cells, with a 16% range boost enabled. Just the form factor itself represents a 14% cost reduction.
To make these at scale, its cell manufacturing will depend on an adapted form of the straight-from powder dry-coating process pioneered by Maxwell Technologies, a company acquired by Tesla in 2019, although Tesla says that the process has already gone through four iterations since then.
That process alone allows a reduction in footprint to just one-tenth the manufacturing area for the same energy content, and promises to reduce the energy spent in manufacturing by about the same.
Tesla also outlined cost reduction and streamlined, vertically integrated processes for obtaining the cathode and anode materials, and noted a simplified pure-silicon anode addition, and a new process through which it hopes to yield refined nickel for the cathode with zero waste water and extract lithium with sodium chloride (table salt).
Future Tesla battery tech will halve costs
In this quest for greater vertical integration, it’s also transitioning to tackle battery recycling in-house, adjacent to the Nevada Gigafactory.
Adding in the savings from other decisions, Tesla says that it is working toward being able to produce a terawatt-hour in the space that it took to make a gigawatt-hour previously, and less space than what Tesla was otherwise currently envisioning for 150 gwh. It would also save 18% in costs per kwh at the pack level.
A so-called pilot facility, capable of producing about 10 gwh of the new cells, is around the corner from Tesla’s Fremont factory, while an actual future plant would make them on the order of 300 gwh.
Tesla is aiming for high-speed, continuous-motion assembly, and its ownership of Grohmann and Hibar will allow them to internally design and coordinate all the necessary production machines and processes.
Future Tesla cell will make energy, power gains
Although the Tesla presentation showed whirring cell-making machines and an industrial setting, it didn't actually show the pilot cell process.
Later in the presentation, Musk confessed why, perhaps: that the dry-coating manufacturing process isn’t quite there yet. He described it as “close to working," but quickly followed that up with: "It does work, but with not a high yield.”
Those pressures of scaling up amid the challenges of scaling something completely new haven’t stopped Tesla before. And it didn't stop Musk from suggesting that Tesla could transition to the role of cell supplier in the future.
"It's definitely not an intentional effort to keep the cells to ourselves," he said. "If we can make enough for other companies, we will, we will supply them."
“Most companies, things slow down,” Musk said. “In this case, they’re going to speed up.”
You can see the full presentation below.