Published on September 21st, 2020 |
by Paul Fosse
September 21st, 2020 by Paul Fosse
In this article, I go over the speculation on Tesla’s possibly overhyped Battery Day and tell you what to look for. If, after reading this, you want more battery news and analysis, I recommend our recent article on LPF batteries that Elon Musk commented on, this article on a new Tesla patent on a metal-air battery, and this article on lithium-ion capacity.
Rob Maurer of Tesla Daily does a great job of consolidating and summarizing the Tesla community’s expectations for the announcements expected for Tesla’s Battery Day. I’ll summarize his video and add my assessment of the probability that each prediction is true or not, and why. Later, I’ll summarize the impact of all of the announcements (spoiler: it’s all about cost).
- Tesla will announce it will start making its own battery cells (Project Roadrunner). I first reported on this in an article a year ago. This has been hinted and rumored by so many sources that I put the probability at 99%.
- That cell will be 5 to 10 times bigger in volume than the 2170 (21 mm diameter and 70 mm length) cell used in the Tesla Model 3 and Model Y. A picture recently been leaked but this was also rumored earlier. It makes perfect sense if you are trying to reduce costs. I’ll put this at 95% likely.
- Tabless design. This is a recent Tesla patent that Elon said in a tweet is “more important than it sounds” because it reduces the distance electrons have to travel, which reduces the additional heat you would normally get from a larger cell. It also may reduce manufacturing costs. The combination of the patent, Elon’s tweet, and the need to do something like this to enable a larger cell without causing major heat issues means I’ll give this a 95% probability.
- Battery chemistry changes. This is a 100% probability. The question is how significant and how quickly.
- Increase silicon in the anode of the battery to increase energy density. I’ll give that 80% probability, but the question is how much can Tesla add without hurting battery life.
- Reduce cobalt in the cathode. Cobalt is expensive, scarce, and the mining of it isn’t always responsible. Elon announced 2 years ago that there would be no cobalt in their next-generation battery. This is likely the next-generation battery that they will talk about on Battery Day. I’ll put the probability at 90%.
- Lithium Iron Phosphate (LFP) batteries that reduce material costs and scaling issues at the cost of density. I don’t think this will be used as Tesla’s main battery but will be used for its lower range vehicles. The question is whether that is 10% or 80% of the vehicles. I don’t have a good way to judge that, but seeing that Elon recently dampened expectations on this technology in a tweet responding to CleanTechnica, I’d say less than 40% of Tesla’s vehicles will use this. The probability that LFP is used for some of Tesla’s batteries is 95% — Tesla needs a backup solution if nickel supplies become an issue.
- Dry battery electrode technology from Maxwell Technologies (acquired by Tesla last year). This battery tech increases density and could cut space needed to manufacture cells by 16× (since you don’t need to dry the wet slurry). This offers a 10% to 20%+ cost reduction that I would say is very likely, since Tesla spent the money to buy the company. I would put this at 95% for some cells. I don’t know enough about it to know if Tesla will use it for all cells or just some.
- Cell-to-pack technology. This battery solution means that you don’t need to put cells into modules and then put them into packs. Especially if the cells are bigger, why take both steps? Why not just put cells into the pack and skip a step? Elon has stated that was needed a decade ago, and he has already said that in the future Tesla doesn’t need the modules. I’ll put this at 85% since it hasn’t been confirmed and isn’t talked about as much as some of the other changes. It may be more likely in a couple of years.
- Million-mile battery. This would be needed for robotaxi’s since they will be used a lot more miles a year. Batteries that last longer would also be useful for the vehicle to grid (V2G) technology, but Elon has stated that it isn’t worth it to use a vehicle’s battery that way. I think that may change, so I give V2G a 50% probability of being announced. I give the million-mile battery a 90% chance of being announced, but I don’t think it will be shipped in every car.
- Faster charging. Charging speed is important for convincing owners of gas and diesel vehicles to switch to EVs. Tesla has already improved supercharging from 90 kWh to 250 kWh charging with V3. At the Cybertruck event, Elon promised the charging rate for the Cybertruck would be greater than 250 kWh, to be revealed later. Maybe now is the time to reveal it. I’ll give this a 50% chance. Tesla may want to save that info for a time closer to the production of the Cybertruck.
- Plaid Powertrain for Model S, X, and maybe Roadster. I think the timing is right for the Plaid Model S, so I’ll give this a 75% chance. Tesla may just have too much to cover, so it may wait and do this separately, but I think Elon will take advantage of the focused media attention to announce it on Battery Day.
- Mining. I think this is too early, so I don’t think Tesla will announce anything here yet. 50% chance Tesla mentions it has some agreements with miners.
- Suppliers. We don’t know how quickly the in-house production will ramp and if Tesla will slow its purchases of Panasonic, CATL, or LG batteries. 75% chance Tesla says something about it. If the company doesn’t, someone will ask.
- Rob didn’t list this as a separate section, but my biggest expectation is Tesla’s plan to increase battery production 50× to 2 terawatt-hours a year by 2030. I think there is a 100% chance Tesla will talk about this, since that is the main purpose of this update. The question is how much detail Tesla will give and precise targets.
Cost Impact Of Expected Announcements
I got the starting price of $158 cost from this article referring to Cairn Energy Research Advisors’ research. The Model 3 LR battery is 1060 pounds. Elon claimed the existing battery contains 3% cobalt, so that would be 31.8 pounds, or 0.424 pounds per kWh. Cobalt’s market price is volatile but closed at $15.34 per pound on September 15 . That means a cost of $6.50 per kWh and $488 per pack. The price spiked to about triple that amount as the Model 3 was ramping in 2018.
In addition to the items that Rob covered, I added a 5% reduction in cost for transportation savings (since the batteries will be made in the same factories as the cars), another 5% for small manufacturing improvements not covered above, and 5% reduction in costs related to buying batteries from a third party supplier. At the scale Tesla is using batteries, it is likely the overhead of those agreements, and the suppliers’ margins are at least 5%.
The total reduction of 64% in the price of batteries is staggering, and I don’t expect Tesla to realize that level of savings for several years. Lithium-ion battery prices have gone down 85% in the last decade, which is a 17% a year reduction. It was thought that it will get difficult to get much lower since the cost of batteries is getting closer to the cost of the materials, but as you can see from the discussion, there are still many opportunities to take a little more cost out of the battery. If the 17% reductions of the last decade continue, we will hit a 64% reduction from today in a little over 5 years from now. I think we all expect Tesla to achieve more than the historical reductions. We expect Tesla to “accelerate the transition to sustainable energy,” which is Tesla’s corporate mission. We will need dramatic reductions in the cost of batteries to enable compact vehicle prices to get to the $14,990 figure predicted by this YouTube analyst. Electric vehicles today have a low enough cost of ownership that many in the developed world can afford them, but these massive reductions in costs will be needed to drive gas cars out more quickly and out of emerging markets.
I think we are all tired of waiting for Tesla Battery Day, but I hope my article helps you prepare for it and figure out if the actual announcements live up to the hype or if they are a disappointment. We will have a lot of coverage after Battery Day coming, include two more long pieces (one really long one) later today. Stay tuned for all the in-depth analysis you expect from CleanTechnica!
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