During Tesla’s last Battery Day in September last year, two announcements he made caught people’s attention. The biggest fuss was made about the tip that Tesla would have a $25,000 car in just a few years. But the more pressing news was the announcement of a new cell type called 4680 by volume in 2021. This cell will be more than twice the diameter and 10mm longer than the 2170 type currently used in most Tesla cars. Musk claimed that it will offer Tesla vehicles 16% more range, provide six times more power, and cost 14% less per kWh. However, the new technology faced several problems.
At Battery Day in September 2020, Musk claimed that by September 2021 Tesla will reach around 10GWh of capacity producing new cells. However, in 2020, the production efficiency was as low as 20%. This is not so surprising, because this is not just a transition to a larger cell with the same technology. The new cell is intended to include the production of “dry” electrodes, which greatly reduces the number of stages in production and also uses different materials for the anodes and cathodes.
The batteries will be part of the car’s structure, allowing Tesla to remove only the chassis elements used to provide a rigid enclosure for the cells, saving vehicle weight and maximizing available space. All of these developments will eventually allow Tesla to reduce battery costs by 56% per kWh, which will have a significant impact on car pricing at the budget end of the market, enabling much longer range vehicles for current premium prices.
When Elon Musk canceled the Tesla Model S Plaid+, he argued that Plaid was “fast enough”. However, another theory is that since Plaid+ promises a range of 520 miles, this requires 4680 cells to be available in quantity, which are not yet available. The arrival of the Cybertruck and Semi seems to be delayed to 2022 as the production of 4680 cells gradually increases, and Tesla Model Y cars from Tesla’s factories in Berlin and Texas will continue to use 2170 cells.
In April, Musk said the reliable 4680 volume is 12-18 months away, and that’s about to reach 2023. However, on Battery Day 2020, Musk was promising 100GWh of production by 2022, which was clearly beyond optimism. Fortunately, things seem to have improved recently and production efficiency is currently around 70-80%, according to Galileo Russell of YouTube Channel Hyperchange. In typical Tesla fashion, the technological promise remains, but the timescale has drastically reduced. In 2017, Tesla Model 3 production fell 84% behind what Musk had originally promised. In early August this year, it had more deliveries. This is nothing new from Tesla. But aside from chip supply issues affecting car sales worldwide, electric vehicles will suffer from a situation where battery demand cannot be met with adequate propulsion units. In fact, battery supply may be the biggest obstacle to the widespread adoption of electric vehicles. EV-volumes recently noted that global sales rose 168% in the first half of 2021 compared to the first half of 2020. A concomitant increase in battery production will be required to sustain this exponential growth, which could mean sales of around 8.5 million new electric vehicles (EVs) in 2021 and over 20 million new electric vehicles in 2022. In fact, as cars come with larger batteries for greater range, the need for batteries will increase even faster than unit vehicle sales.
For this reason, it is imperative that Tesla quickly solves the problems it is experiencing with its 4680 cell. The next vehicle enhancements and new vehicles – including the Cybertruck, Semi and the mysterious $25,000 “Model 2” – will all depend on this technology and face increasingly fierce competition. Tesla isn’t the only company innovating in battery technology, and the sleeper giants of European auto manufacturing have woken up to refocus on electric vehicles, including Volkswagen and Stellantis. These companies also work with local European battery suppliers.
The promise of the 4680 cell is substantial and clearly not an easy technology to perfect. It will be another step change in electric vehicle capabilities when it reaches this volume. At the moment, it looks like it will be at least 12 months later than promised.
Source: Forbes, Tesla