By 2030 Tesla will manufacture 20 million vehicles with carbon neutral batteries while deploying 1.5 TWh of grid storage solutions, annually. With 10 TWh/year market opportunities in both the transportation and energy industries, Tesla announced its intention to capture 3 TWh of the combined market using new 4680 cells they will manufacture in-house. That is 100x what Panasonic produced at Giga NV, last year and is enough cells to unilaterally push two industries across the tipping point! Tesla’s plan, fully implemented, will make widespread adoption irreversible. And the more cells they (and their competition) can buy from their existing cell suppliers, the sooner those tipping points will be reached. This plan is decisive action directly against global warming, while also strengthening localized supply chains and manufacturing base. So much win!
Detailed technical plans, with quantified benefits
Tesla laid out detailed technical pathways for achieving its intended improvements and quantified the gains captured by each (see slide below). By 2025 Tesla expects improvements achieved from vertical integration sufficient to unlock 54% greater range, 56% lower cost per kWh produced, and 69% lower investment required per GWh of manufacturing capacity.
Tesla stated they will manufacture 100 GWh of their newly introduced 4680 cell, (referencing width and height in mm), in 2022 and 3TWh of them in 2030. That would translate to 1.5 TWh of stationary storage installations and 20 million EVs per year.
Let’s go through the five points I referenced in a diary, Tuesday.
1) Different cell chemistries = Yes. Three different cathode chemistries
Tesla has divided their cathode chemistries into three groups as shown in the image below.
This allows diversification of the supply chains for each continent, to minimize the distance raw materials travel from ground to product. This lowers cost and carbon footprint. But in the case of lithium, Tesla has an extraction method they’ll trial in Nevada, which may be carbon negative, meaning the entire local supply chain from ground to battery may be able to net reduce carbon from the atmosphere. This is one of many, many areas where there will be enormous interest in further details.
2) Improved build process = Yes. 7x per line
The trick is to do everything while moving really fast without stops. Tesla’s new manufacturing process eliminates many steps and does the rest while the battery cells are in motion.
Panasonic has 12 lines at Giga Nevada, producing 35 GWh per year, after ramping production as fast as possible starting in 2013. Those cells will continue to be built, but unless Panasonic can scale their production as quickly as Tesla, they will be relegated to a shrinking sliver of Tesla’s product portfolio.
3) The machine that builds the machine = Yes. Less cost & smaller footprint
10x footprint reduction and 75% investment reduction per GWh of production capacity, compared to Panasonic’s line in Giga Nevada, in 2018.
Tesla is going with a dry electrode in their new 4680 cell, because the best step is no step.
4) Drive down the cost curve = Yes. Expect unveil of $25,000 Robotaxis in about three years — probably two-piece casting with structural battery pack
Go back and look at the slide following the opening paragraph to see how cost, range and investment are all affected directly in their ramp up of cells. For every doubling of cell production capacity there is expected to be a consistent learning curve. But legacy manufacturing processes have vestigial fat that legacy manufacturers have assumed just has to be done that way because it always has. Tesla doesn’t accept that, and has challenged every step of every process.
Tesla announced, but has not unveiled, a $25,000 robotaxi. My guess is these will be designed regionally for cultural adaptation, and there will be a good natured design competition between Tesla’s regional design studios to produce the most efficient robotaxi. The gigapress casting machines will practically be able to print these Jetson-mobiles, and the new body + batteries technique, in which the cells provide structural strength for the vehicle while reducing cost, weight and complexity and improving manufacturability. If you think of a battery pack as a top lid and a bottom lid with a bunch of cells glued between them, just replace those lids with the top casting and the bottom casting, in which the pack lids take the shape of the vehicle. Simplicity is the ultimate sophistication. — da Vinci
5) Technical breakthroughs = Yes but no. Great new techs within existing focus.
One of the benefits of a robust R&D program is discovering new opportunities for improvement and knowing what’s possible. But the way Musk’s brain works, he simply sees that as evidence that the way things are done today, is wrong. So on stage talking about simplifying their supply chains, Elon said “If you work at any point in the battery supply chain and know ways things can improve, please help Tesla be less wrong.”
V2G is not a thing at Tesla. Kinda. The problem in the US is that meters don’t isolate households from the grid, so connecting your car to power your home would also allow energy to flow to the grid, unless you did the re-wiring that comes with a Powerwall installation. In Europe, however, those switches exist, so Musk said they’ll probably do a software update for cars in Europe which will allow Tesla owners to connect to AutoBidder software, and use their battery to provide grid services. Frankly, they didn’t seem to think this was a big benefit to the vehicle owner, so if customers weren’t asking for it Tesla probably wouldn’t do it. This doesn’t fit with my understanding of their direct efforts in the energy market, so there are clearly barriers to efficiency that I’m not familiar with.
So let’s cut to the chase, has Tesla presented a path for shifting the world to sustainable energy? Well, they made direct appeals to their competitors to head in the same direction, but no licensing deals were announced. Tesla’s own manufacturing vision only goes to 3 TWh per year, by 2030, but they’ve expressed no interest in trying to go it alone. Tey want competition, and their presentation should surely have stated some fires in some board rooms around the world. If Tesla fulfills its ambitions over the next ten years they will have single-handedly broght the transportation and energy industries to the electrification tipping point.
Which makes sense, given that global warming really is an All Hands on Deck kind of emergency.