Tesla is looking to kickstart a production program for internally-produced batteries for its electric cars. This will result in dropping down costs and helping bring EV into the hands of a greater number of consumers.
Until now, Tesla has been sourcing its batteries from Panasonic, which uses the small cylindrical “18650” and “2170” formats to enable versatile implementations. The time has come for Tesla to do something of its own, and do it in a more cost-efficient manner of course.
So, what Elon Musk presented during the recent “Battery Day” event is a tab-less cell design of a new “4860” type. This is essentially taking out all of the unnecessary structure, making the battery more packed with what matters. Moreover, the new cell needs no cobalt at all, which is admittedly a pain to source.
All in all, because the design is simpler, the cell doesn’t require expensive materials, and it is to be assembled in-house, the cost of those new batteries is expected to drop by 56% compared to buying cells from vendors.
This massive cost-cutting step will enable Tesla to finally introduce an EV car priced at $25,000, leaving everyone else far behind.
The timeline for this is 2022, but Tesla hasn’t been doing very well with timelines so we may see this getting postponed for later. But this isn’t to say that 4860 is still stuck in the lab doing preliminary proof of concept tests. It’s actually already out there getting road-tested, and the results are very encouraging for Tesla’s engineers.
Suppliers. We’re only doing high energy nickel ourselves, at least for now. Also, maybe the presentation wasn’t clear that we’ve actually had our cells in packs driving cars for several months. Prototypes are trivial, volume production is hard.
— Elon Musk (@elonmusk) September 26, 2020
As for what happens with the traditional suppliers and the higher-end models, this is not going to stop now. On the contrary, Tesla is planning to source more cells than ever before as the company leads the EV revolution and fuels the rapid development of the market.
Pumping “4860” cells in adequate numbers to reap the cost benefits of mass production is not as simple as some may have thought after watching Musk’s presentation, so yeah, this is going to take a while.
