Tesla 4680 Battery Update — Scaling Up Is Hard Work

Three years ago, Tesla acquired Maxwell Technologies, a company that specialized in making advanced ultracapacitors. But Tesla didn’t buy the company for that. It bought Maxwell because of its dry cathode expertise, knowledge essential to manufacturing the 4680 battery cells Tesla was planning.

That technology allows Tesla to eliminate the more complex and costly wet-coating process used in traditional battery cells like the 2170 cells Tesla has been using for years. That process is expensive because it needs a substantial amount of electricity, machinery, factory space, time, and a large number of workers.

To coat electrodes in the wet process, battery producers mix the materials with toxic binder solvents. Once coated, the electrodes are dried in massive ovens, with the toxic solvents that evaporate in the process and are recovered, treated, and recycled. With the new technology, electrodes are coated using different binders that use much less liquid. That means they don’t need to be dried, so the whole process is cheaper, faster, and less harmful to the environment. Because of its simplicity, the process allows Tesla to cut capital spending by a third and slash both the footprint of a factory and its energy consumption to just 10% of what is be needed for the wet process.

Ramping Up 4680 Production Is Challenging

Reuters says it has spoken with a dozen experts with insight into the manufacturing process for Tesla’s 4680 cells. Nine have close ties to Tesla and three of the nine have examined Tesla’s new and old battery technology inside and out through teardowns.

“They can produce in small volume but when they started big volume production, Tesla ended up with many rejects, too many,” one of the sources said, and added that production yields are so low that all the anticipated cost savings from the new process have failed to materialize — so far. The sources say Tesla is only halfway toward its goal of making the larger battery cells in the quantities it will need to meet its future production goals.

Maxwell developed its dry coat process for ultracapacitors, and the challenge with coating electrodes for EV batteries is that they are much larger and thicker, which makes it hard to coat them with consistent quality at mass production speeds.

The 4680 Payoff Is Less Expensive Batteries

If all the potential efficiencies from dry coating and the bigger cells are realized, the manufacturing cost for the Model Y’s 4680 battery pack should fall to $5,000 to $5,500 — roughly half the cost of the 2170 pack, the sources told Reuters. The rising cost of battery materials and energy pose a risk to those forecasts, however, and Tesla has not yet been able to significantly improve the new battery’s energy density or the amount of power it packs.

That’s because the dry coating technique used to produce the bigger cells in Tesla’s 4680 battery is so new and unproven that the company is having trouble scaling up manufacturing to the point where the big cost savings are realized. “They just aren’t ready for mass production,” said one of the experts close to Tesla. Despite that, the savings Tesla is expected to achieve will end up making the 4680 battery the industry’s “best in class” for the foreseeable future, one source said.

The 4680 cells are 5.5 times the size of the 2170 cells by volume. Tesla needs about 4,400 of the 2170 cells to power the Model Y and there are 17,600 points that need to be welded — four per cell — to create a pack that can be integrated into the car, according to the sources. The 4680 battery pack for the Model Y only needs 830 cells and Tesla has changed the design so there are only two weld points per cell. With only 1,660 welding points needed, the cost of battery packs with the larger cells should be significantly lower. The simpler design also means there are fewer connectors and other components, which allows Tesla to save further on labor costs and machining time.

The larger cells also have a sturdier outer case which allows them to act as a structural component of the car. That eliminates the need to bundle cells into modules which are then installed in a traditional battery pack. The sources said that this “cell to vehicle” design means Tesla can reduce the weight of a traditional 1,200 pound battery pack by about 55 pounds.

That may not seem significant, but one source claimed that fact alone could save about $500 to $600 per car. In all, it is expected that the widespread use of 4680 cells would cut the cost of the battery pack for a Model Y in half and allow the company to lower the cost of the cars by 8%, according to people with direct knowledge of Tesla operations.

Musk’s promised improvements in battery cost and performance are seen by investors as critical to Tesla’s quest to usher in an era where it can sell a $25,000 EV for a profit and stand a better chance of hitting its 2030 targets. read more. Battery systems are the most expensive single element in most EVs, so making lower-cost, higher-performance packs is key to producing affordable electric cars that can compete with combustion engine rivals on sticker prices.

The sources predict that Tesla will find it difficult to fully implement the new dry coating manufacturing process before the end of this year, as Musk had previously forecasted. They suggest 2023 is a far more likely timeline. Stan Whittingham, a co-inventor of lithium-ion batteries and a 2019 Nobel laureate, told Reuters Elon Musk has been overly optimistic on the time frame for commercializing the new technique. “I think he will solve it, but it won’t be as quick as he likes. It’s going to take some time to really test it,” he said.

Halfway There

According to the experts, Tesla has only been able to cut the Model Y’s battery cost by between $2,000 and $3,000 so far, about half the savings Tesla had planned for the 4680 battery when it was unveiled two years ago. The savings that have been achieved are due mainly to the design of the new 4680 cells, which are bigger than those in Tesla’s current 2170 battery. The rest will come from solving the dry coating production challenges.

Building on technology it acquired when it bought Maxwell, Tesla began making 4680 dry cells this year, first in a pilot factory near its Fremont, California, production facility and more recently at its new global headquarters in Austin, Texas.

“Bulking up the battery cell helped a lot in boosting efficiency, but pushing for 50% cost savings for the cell as a whole is another matter,” one source said. “That will depend on whether Tesla can deploy the dry coating process successfully in a factory.” The Tesla faithful are betting Musk and his band of merry pranksters will figure this out sooner rather than later, and when they do, it will be another leap forward for Tesla and keep it the leader of the EV revolution.

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