Key Announcements of Tesla’s Battery Day
On the night of September 23rd, Elon Musk’s Tesla held an annual meeting of shareholders in Palo Alto and the highly anticipated Battery Day event to celebrate the latest developments and near-term plans. We have collected key announcements in one place.
New format lithium-ion cell 4680
• One of the main announcements ‒ a sensational fundamentally new battery of Tesla design. The day before, photos of elements prototypes of the new format got into the network, the design was confirmed. The new 4680 format cylindrical element (46 mm ‒ diameter, 80 mm ‒ height) uses a manufacturer’s patented non-contact/wide contact (tabless) design, which stands out for lower internal resistance values ‒ instead of a contact plate, the current is supplied through a wide contact along the entire edge of the electrode strip.
According to Drew Baglino, senior vice president of power and battery development, Tesla engineers “laser-etched” the cathode foil in the cell to create a “tiled coil”, which reduced the charge travel to 50 mm across compared to 250 mm in current cells.
• Compared to 2170 elements (manufactured by Panasonic at Tesla Gigafactory 1 and installed in Model 3 and Model Y), the new form factor provides a fivefold increase in energy intensity, a sixfold increase in power and will increase the range of Tesla vehicles by 16%. The manufacturer also says that the cell price will be reduced by 14% per kWh of capacity. The manufacturer did not name a more exact price, but earlier the price was $100 per kWh of capacity. Many experts agree that after reaching this milestone ($100 / kWh), there will be a turning point and prices for electric models will drop to the level of traditional cars with internal combustion engines or even lower.
• Tesla will be engaged in the production of new battery cells in 4680. At the presentation, the head of the company, Elon Musk, said that the company is “close” to launching a trial production. At the same time, the mass production of new Tesla batteries, as we learned yesterday, will not begin until 2022. They are primarily intended for future Semi, Cybertruck, and Roadster vehicles. At the same time, Tesla will continue to buy batteries from third-party manufacturers (Panasonic, LG, CATL, and others), with the company talking about an increase in orders and willingness to buy as much as suppliers can sell.
Reduced prices for Powerpack
A day earlier, Tesla reduced the prices for the Powerpack battery backup power system by 27% ‒ it fell from $172 thousand to $125 thousand (or to $539 per kWh of capacity).
Tesla’s new cathode factory
Tesla will build a new cathode plant for its batteries in North America to reduce supply chain costs and simplify cathode manufacturing.
According to Musk, the current process is ineffective, and the company has figured out how to reduce the cost of producing cathodes by 76% and at the same time reduce water consumption to zero (the technology of dry cathode production without solvent is a development of Maxwell Technologies, which Tesla bought in 2019).
Musk did not go into details of where and when the new plant will be built, but at the beginning of his presentation, he reiterated that he plans to build Gigafactory plants on all continents. In announcing the construction of Gigafactory 5 in Austin, Texas, Musk said he would consider the city of Tulsa, Oklahoma, for future Tesla projects.
New Model S on Plaid Transmission
• Tesla has unveiled the new flagship Model S on a Plaid three-electric all-wheel drive transmission. At the same time, the manufacturer confirmed that the novelty will not be released this year, as originally planned, but at the end of the next.
• Last week, the Model S Plaid prototype completed the Laguna Seca circuit in 1:30. By comparison, another Model S Plaid prototype last year did the worst at 1:36.55, while Lucid Air completed a lap in 1:33 earlier this month.
The website lists all the key features of the new Model S:
o Acceleration from 0 to 100 km / h ‒ less than 2 s.
o Maximum speed ‒ 320 km / h.
o The power reserve on one battery charge is about 840 km.
o Time to travel a quarter-mile segment is less than 9 seconds.
o Starting price ‒ $139,990.
• Tesla also announced a zero-cobalt battery (the most expensive component in modern electric vehicle batteries). Avoiding cobalt would also solve an important ethical problem. Tesla is considering three options for replacing the cobalt cathode ‒ lithium iron phosphate LiFePO4 (LFP), nickel manganese (NM), and nickel to create batteries with maximum energy capacity.
• Alas, while Tesla does not even name the approximate dates for the appearance of such batteries. But you can remember that Panasonic not so long ago announced plans to release such batteries in the next two to three years.
$25,000 car ‒ Musk’s new target
Tesla plans to reduce the cost of its battery cells and battery packs with the ultimate goal of building an electric vehicle for $25,000. Musk says Tesla will achieve this goal by using its new battery cell “plates” and replacing materials inside the cell, which should allow Tesla to “halve” the price per kilowatt-hour.
Today’s battery packs cost between $10,000 and $12,000, depending on their capacity. Low battery prices could be the key to opening up more affordable high-volume electric vehicles. Tesla is aiming to bring the cost of future units down to less than $6,000, which will bring the unit cost well below $100 per kWh.
The average price of electric vehicles in the United States has been declining, most recently falling from $64,300 in 2018 to $55,600 in 2019, a 13.4% drop. And that’s largely thanks to the Tesla Model 3. But that’s still a high price tag compared to the $36,600 average price for a regular gas car (although that price is constantly increasing).
Model 3 was supposed to be Tesla’s first car for the general market. Right from the start, the company’s “master plan” outlined by Musk in a 2006 blog post described how the desired electric sports car would be built to convince people that electric cars could be cool (which was a daunting task at the time).
But Musk’s plan to build a $35,000 Model 3 never came to fruition due to the company’s well-documented “manufacturing hell”. Today, the Model 3 Standard Range Plus starts at $37,990, the Long Range starts at $46,990, and the Performance starts at $54,990.
This isn’t the first time Musk has predicted Tesla will slash the cost of its electric vehicles. He pledged a $25,000 electric car for the first time back in 2018, which he says will be possible within three years.
Tesla shares fell 5.1% to $402.60 a share in the previous trading.
However, Morgan Stanley supported the automaker, noting that Musk and his company have shown significant progress in the production of electric cars. The representatives of the financial institution assessed the scale of the tasks that the company plans to perform,
Elon won’t do it alone. Tesla needs help to achieve everything they have planned, noted analysts at Morgan Stanley.
On September 23, Tesla shares dropped, even more, reaching $388.28 per share.
However, market experts assure that there is no need to take seriously the fall in Tesla’s share price. Indeed, due to the influx of non-professional investors, any negative news can affect the value of the company’s assets.
Over the past few months, Tesla shares have surged like Bitcoin: tenfold in a year. One of the reasons for this growth, experts called the high expectations from this very event ‒ Battery Day.
Everyone was waiting for a big breakthrough and improvements. Musk said that there will be enough of them, and as practice shows, he often fulfills his promises, rather than just speaks. But it turned out that investors are not ready to wait: they need new developments here and now, and not “in three years”.
Even during the presentation, the value of the company’s shares began to decline, by the end of the day Tesla had lost almost 6%. Also, the stock prices of the company’s battery supply contractors have dropped: if Tesla is indeed developing its batteries, then from about 2022 a whole pool of companies will lose a large volume of supply orders.
Musk is confident that this year the company will still sell more than 500,000 cars (last year 367,000), and in the future, thanks to new cheaper batteries, it will be able to multiply sales worldwide.