The Frightening Economics of TESLA’S 4680 BATTERY CELL

this video is sponsored by squarespace the one-stop shop for building scalable websites to run your online business tesla currently has some of the most efficient and performant electric vehicles on the road especially given the price the company has come a long way since elon musk first published his master plan for the firm's road map in 2006 citing the necessary steps that tesla had to take by starting with a high-priced low-volume vehicle and riding the cost curve to work their way down in price increasing volume at each phase tesla launched their original roadster in 2008. this sports car sold for as high as 170 thousand dollars and contained a 53 kilowatt hour battery pack today the model s-plaid tesla supercar with a 0-60 acceleration of under 2 seconds weighing almost twice as much as the original roadster and carrying a 100 kilowatt hour battery pack costs just 130 000 it's the fastest production car in the world and can beat out any ferrari or lamborghini at a fraction of the cost and still gets 400 miles of range but elon musk's goal isn't to sell high-priced cars these vehicles have been a means of funding other parts of the business and plowing back the cash to invest in new technologies and products tesla's mission is to accelerate the arrival of sustainable energy and so they need to get people off gas cars and onto electric as fast as possible the model 3 is supposed to be the answer to this problem the rear wheel drive version now starts at just under forty four thousand dollars and is tesla's most affordable offering it has a comfortable 267 miles of range an impressive 0 to 60 time of 5.8 seconds and uses a 54 kilowatt hour battery pack about the same size as the original roadster but tesla is able to sell this vehicle profitably at less than one-third the price while comparing a sports car to a family sedan isn't apples to apples electric vehicles have come a long way since the early days of tesla nonetheless with inflation pressures and rising costs tesla has had to raise prices on all of their offerings including the model 3 which used to be closer to 37 000 this appears to be a temporary increase as supply chains worldwide have been disrupted by the pandemic elon musk reiterated during tesla's annual shareholder meeting that tesla's intentions are in fact to still lower the prices of vehicles long term and tesla has a plan to make this happen the most expensive part of an electric vehicle is still the battery pack which can cost thousands of dollars bloomberg new energy finance suggests that in 2010 the average lithium-ion battery pack was over 1100 dollars per kilowatt hour but in 2020 the volume weighted price for battery electric vehicles was 126 dollars per kilowatt hour which is a massive drop tesla's battery pack costs may even be slightly below that now but using 126 dollars per kilowatt hour a model 3 battery would cost close to 7 000 however last year tesla's battery day event tesla announced its plans to build a new type of battery cell the 4680 while the purpose of this cell is to further reduce battery costs below the 100 per kilowatt hour level a key benchmark that's said to enable battery electric vehicles to be more affordable than gas cars even on sticker price the 4680 may actually have the potential to completely transform tesla as a company and the entire electric vehicle industry traditionally tesla has been using the 18650 form factor for model s and x and they jointly worked together with panasonic to develop the 2170 cell which is produced at the gigan nevada factory and the us made model 3 and model y use the 2170 form factor the giga nevada factory has an approximate output of 35 gigawatt hours which is pumped out each year across 13 battery manufacturing lines this 35 gigawatt hours is responsible for powering all of tesla's us-made vehicle output including stationary battery packs as well we can estimate that 35 gigawatt hours translates to about 500 000 mid-sized vehicles such as the 3 and the y which was basically the entire company of tesla in 2020 now if tesla was able to suddenly come across hundreds of gigawatt hours of 2170 cells they would happily take that however the 2170 design is at least five years old and hasn't been able to scale up fast enough to satisfy tesla's level of demand in 2018 it appears that even panasonic which has a good read on the industry and is an expert at making batteries being one of the largest battery manufacturers in the world even they grossly underestimated electric vehicle demand just three years ago they projected that by 2026 global ev demand would rise to 3 million units it's 2021 however and we've already surpassed 3 million units forward-thinking investment firm arc invest is forecasting 40 million units by 2025. tesla has recognized this unmet need but instead of investing in and trying to scale up old technology for the last few years they've been working on their own new 4680 battery cell which is purpose built for true mass market scaling and will hit the market in 2022 tesla's 4680 battery cell itself is optimized primarily for both range and cost reduction just by changing the form factor alone however partially because of this change tesla needed various new innovations in order to maintain and in many cases boost the performance of this new battery cell for example as the diameter of the battery gets larger it becomes more difficult to cool and so tesla has figured out how to maintain charging rates and to dissipate heat so that they can use this larger cylindrical battery type tesla is also using their new tablets design which basically replaces a single tab with a whole layer of tabs making it so that electrons don't need to travel as far inside the battery and thus reduces heat generation combined with tesla's other innovations in cathode and anode design and cell factory and structural battery pack tesla is able to achieve a 56 percent reduction in battery cell costs from where they're at today it's important to realize that most competitors are still far behind tesla's current efficiency price and performance metrics most of them do not make their own battery cells and because of that they don't have the advantage of designing the cells to really be integrated as part of the vehicle and sort of have them work together as one combined unit as we see with tesla's structural battery pack but almost more important than all of these changes tesla has made will be the rate at which they can scale their battery production lines fortunately their improvements are designed with manufacturability at the forefront these advancements of the battery cell itself is really like an added bonus a major bonus of course but as mentioned earlier if tesla was able to get an abundance of 2170 cells that would have been good too it's the manufacturing speed that will be a game changer and the advancements of each part of the battery will enable that manufacturing speed to increase along with the number of gigawatt hours that the company can produce now just as scale is essential for tesla it's also important for running your business or website that's why today's sponsor is squarespace an online platform that helps you create your own websites in a beautiful and scalable way i created my own squarespace website and the first thing i noticed was a large variety of templates to choose from it's really an all-in-one platform for building professional websites stores or portfolios i selected this blog style design which interested me since i like to talk about the stock market and of course tesla now i wanted to make it into a business and with squarespace this can be quickly turned into a storefront to add digital or physical products and services and you can even check the related analytics all in one spot squarespace even has an integrated set of tools for automatically optimizing your website for mobile devices and they help make search engine optimization a breeze with simple guides to maximize your prominence and search results so if you don't have a website or online store presence today and you're thinking of starting one look no further than squarespace and head to squarespace.com tmio tesla to save 10 percent off your first purchase of a website or domain using code tmio tesla and thanks to squarespace for sponsoring this video the reason why manufacturability is at the forefront is because scaling production alone can help to drastically reduce costs according to research and investment firm arc invest battery cost follows wright's law a cost decline model where for every cumulative doubling in the amount of battery energy produced the cost falls by a certain percentage and so the time that it takes before cost drops is irrelevant there doesn't need to be a two year wait before costs drop by 15 percent for example according to wright's law if manufacturing output can keep doubling then battery costs will keep following totally independent of time and in turn this will directly translate into lower cost vehicles for consumers and so this is why tesla is focused on getting their battery lines operating at extremely high speeds and volumes during tesla's battery day event last year they had started a pilot program for a 10 gigawatt hour production line in fremont at the time the yield was low but tesla has made new engineering changes over the last year to keep yield high enough at high speeds what's exciting is that even this single pilot line is about a third of giga nevada's production in 2020 tesla's actual battery lines are planned to be 20 gigawatt hours each which is seven times more than the current giga nevada lines for which there are 13 at the factory by 2023 it appears that tesla is aiming to have five production lines worldwide in order to achieve 100 gigawatt hours of battery energy production with the 4680 the current 10 gigawatt hour pilot line will be used to supply gigatexas with 4680 batteries at least until it's able to produce its own according to footage from jeff roberts tesla has already started moving equipment into gigatexas for their battery production line now it's important to realize that every single dollar that tesla spends somehow makes its way into the cost of the vehicle and therefore the price and so the 4680 cells play a key role in not only being more efficient on their own but making other parts of tesla's vehicles and business more efficient as well because the 4680 cells are larger fewer of them are required inside the battery pack this means that there's actually less overall metal casing and more actual battery anodic cathode material inside each pack this is likely how tesla is able to get a 16 range boost and 14 cost reduction per kilowatt hour just by changing the battery's size and this also means fewer electrical connections are required perhaps a smaller number of cooling lines and other benefits making a single 4680 battery is like making five 2170 cells and it appears that it actually takes tesla less time to produce one 4680 cell compared to a 2170 cell moreover other vehicle components may no longer be needed thanks to the 4680s we've already seen that tesla's structural battery pack relies on the 4680 cells this might be because it's not easily possible to swap out the batteries inside a structural pack and so these 4680 batteries are expected to have higher longevity and will not need to be replaced throughout the life of the car which helps to enable the structural pack and reduces the overall price of the vehicle if these batteries have different temperature properties and don't need as much heating and cooling then maybe the vehicle's hvac system for instance can be smaller or use less power allowing for even more range and therefore fewer batteries are needed as well and if the batteries have more stable chemical properties perhaps less protective material is required to keep the batteries separated from each other and parts of the vehicle in my new 2022 model y video i described many of the changes tesla is making to the vehicle itself that could cut costs as well but there are things even beyond the vehicle and even the factory that tesla is doing in its processes that even elon musk would likely admit is stupid or redundant tesla does strive to be less dumb over time according to elon for example unlike giga nevada giga berlin and giga texas will have their own local battery production currently in the united states the batteries come from sparks nevada but the cars are built in fremont california so the raw materials need to be shipped to nevada batteries come out of the factory need to be loaded onto trucks shipped over to fremont unloaded with machinery from the trucks and this constantly needs to occur however because the new 4680 production line has a much smaller footprint the batteries can be produced at the same site as where the vehicles are manufactured according to joe tegmeyer battery cell production at giga texas is in the same building as the rest of vehicle manufacturing this means tesla can automate the process by connecting the output of the battery production system directly to the production lines of integrating the batteries and packs right into the vehicle no more shipping of batteries around just for fun and this will indirectly reduce vehicle costs outside of just battery cell improvements but this is still in part a result of the 4680s benefits furthermore not only have tesla's battery practices become more efficient with huge cost declines across the board in processes used to create cells but the initial investments in equipment and factory space has also seen a massive decline many don't realize that this directly affects vehicle costs for example gigan nevada initially costs 5 billion with billions more sunk in later on by both tesla and panasonic however with a 69 dollars per gigawatt hour cost reduction in the factory itself the entire giga nevada can be replaced by two 4680 battery lines at a fraction of the cost we can estimate that a seven billion dollar factory could now cost two billion dollars a savings of about five billion in capital expenditures alone now again every dollar that tesla spends shows up in the price of the vehicle somehow and that's no exception for factory investments this shows up as depreciation when tesla reports its earnings which is baked into tesla's automotive costs when tesla purchases the factory the value is added or capitalized onto the balance sheet and each quarter where the factory is in operation a portion of the initial investment is taken off the balance sheet and run through tesla's income statement as an expense called depreciation a smaller investment cost means less depreciation or another way of looking at it if tesla invests the same amount of money say 7 billion dollars on a new factory but this new factory can produce significantly more batteries and therefore make considerably more cars then the same amount of depreciation is now distributed over more vehicles this allows tesla to reduce the price per vehicle and still maintain their margins because it's exactly as if the cost per vehicle went down this is daunting for competitors who are on their first factory iteration and have all of these inefficiencies and embedded costs pushing their way into the price of their vehicles making them uncompetitive look at volkswagen an established player no stranger to building factories has a crisis meeting where they're shocked that tesla is able to produce cars three times faster than their electric car plants and at tesla's new factories with the 4680s this rate will likely increase even further and by the way stop using yahoo finance stop using google finance and have a look at our website the market is open.com where we have instant stock quotes and financial data going back 10 years and it's all freely available now something that elon musk has recently stated was that the vast majority of batteries in the future will be iron based tesla outlined as a battery day showing that their high volume vehicles and stationary storage would be using iron-based cathodes for vehicles this wasn't really possible even just a few years ago the made in china model 3 was the first of tesla's vehicles to use iron-based or lfp batteries provided by catl the largest battery manufacturer in china these are prismatic battery cells however based on tesla's diversified cathode approach for 4680 battery cells it's highly likely that tesla will be making their own lfp batteries with the cylindrical 4680s lfp batteries have a number of properties that make them very desirable for evs except their main drawback is low energy density a sam chorus from arc invest analogizes ev makers can only bridge the gap to use lfp batteries if the entire vehicle is efficient enough to achieve an acceptable range and so tesla has been able to boost efficiency gains across all aspects of the car including their motors reducing weight throughout hvac etc in order to allow them to use these batteries the catl batteries as mentioned are prismatic which allows them to be tightly packed in a rectangular battery pack as well but tesla's 4680 cells are also packed together quite closely and in new versions of the model y which is the first vehicle that both giga austin and giga berlin will be producing there are many more advancements to increase efficiency such as the aforementioned tablets design and new anoded cathode processes therefore while it hasn't been confirmed which types of cathodes tesla will be implementing using low energy density lfp cells even in the model y which is a larger vehicle than the model 3 may only be feasible in these new versions of the vehicles coming from these new gigafactories one of the biggest advantages of lfp batteries is low cost it's estimated to be about 20 to 30 percent cheaper per kilowatt hour but also the materials used iron for example is much more abundant than the nickel used in higher energy density batteries and therefore prices are more stable and materials are easier to source elon musk has called upon mining companies from around the world to produce more nickel for its higher energy density vehicles such as cybertruck and the semi since nickel is more difficult to source but there's no issue with iron or phosphorus and tesla has said that it will be mining its own lithium as well as sourcing from others low-cost lfp batteries also mean that tesla can once again begin reducing prices and still maintain their margins once their 4680 manufacturing lines are able to achieve high volume production tesla will stick with nickel based cathodes for the long range and higher energy density vehicles that they produce but looking down the road if tesla releases a 25 000 vehicle something that they have already announced is in the works as a robo taxi in the united states and potentially a small hatchback or compact car in china lfp batteries would make perfect sense and probably be necessary in order to reduce cost and scale these vehicles to the masses which is why elon musk is confident that lfp batteries will be widely used in the future in addition lfp batteries also have a much higher cycle life than the nickel based nca and nmc batteries commonly used in electric vehicles this means low degradation even after many charge cycles this is perfect for tesla's robo-taxi vision since robo-taxis will likely be driven much more than a regular car and be charged more frequently but even for model 3 or y this is evidence of a million mile battery three to four thousand charge cycles could last multiple car lifetimes and in many cases the vehicle would still have over 80 percent of its charge capacity even after 4 000 cycles so these batteries will never need to be replaced throughout the life of the car now lfp batteries have other drawbacks including poor low temperature efficiency however teslas are able to precondition batteries to the right temperature especially before going to a charging station since lfp also has lower charging efficiency than nickel-based cells but this said lfp batteries perform well at high temperatures and they are far more resistant to catching fire in the event of a short circuit than the other type of cells this means that lfp has built-in safety and tesla can actually use less shielding material around the batteries since the probability of catching fire is quite low in the end there are trade-offs all the time in engineering but tesla's 4680 cells combined with the lfp chemistry has many advantages especially related to cost and material supply which will be crucial in helping tesla scale its vehicle production to new heights tesla has been working to carefully manage the disadvantages of each type of cell and that will also continue to improve over time as a matter of fact if tesla can slowly move the lfp-based 4680s into more areas of their vehicle lineup this frees up nickel based battery supply in order to scale up semi cybertruck roadster and tesla's other future products especially since a vehicle like the semi will need many cells perhaps the equivalent of 13 model 3s for a single truck on the most recent conference call tesla stated that the company isn't really looking at new products while there are battery constraints and so a ramping of the 4680 cell production line across tesla's new gigafactories will not only help tesla scale the current product line but will also finally unlock new products the main reason why the tesla semi hasn't hit the market in volume yet is because tesla simply doesn't have enough cells available and it's not economically viable to take away cells from model 3 for example which is quite lucrative for tesla in order to build the semi selling 13 model threes could net 650 000 for tesla in revenue whereas one semi would be up to 180 000 so it makes sense to keep the batteries with model 3 and build excess capacity for new products and so freeing up the battery bottleneck with the 4680 cell production lines could be the key for unleashing tesla's roadmap as an example looking at rivian ford and gm who all have offerings for the electric pickup truck market in the us even if tesla arrives late to the party with the cyber truck but actually has the capability to produce them in high volume that could be very scary for the incumbent competitor which is ford right now which dominates the pickup truck space an extremely lucrative market in the us and the largest and what's more is that many people seem to think that 4680 means cyber truck and semi will finally be produced but combined with the low cost lfp batteries and ultra high volume tesla's 25 000 car could come into play sooner than people think and truly decimate the gas car market and even allow tesla to maintain an extremely high ev market share tesla isn't kidding around when they say they want to accelerate the switch to evs in addition to their own production it appears that they are also enlisting panasonic to produce 4680 cells for tesla even at tesla's giganevada factory although they're partnered with panasonic and jointly developed the 2170 cells panasonic still had many proprietary and trade secrets that keeps them fairly separated from tesla even within the factory it would be interesting to see the details of the partnership but panasonic is starting with a test line for 4680s and will invest heavily into boosting production if the testing goes well meanwhile tesla appears to be hiring aggressively for battery related jobs even at the fremont pilot facility they're preparing for explosive growth to analogize in tesla's artificial intelligence division the team is building the dojo training computer in order to enable faster developer iterations for training their full self-driving software it's almost like the 4680 battery cell production will do to vehicles what dojo is doing for ai these batteries will allow tesla to drastically expand their current lineup actually build the end user products that they want much faster without delays and unleash new possibilities through tesla's innovative roadmap so what impact do you see the 4680 batteries having on tesla as a company and on competitors and let me know in the comments if there are additional benefits for 4680s that i left out be sure to have a look at our last video detailing the improvements of the upcoming 2022 model y and don't forget to check out our squarespace sponsor link in the description below please hit the like button and subscribe we would really appreciate that and a huge shout out to all of our patrons that helped to support our channel your support helps us to continue to make great content thank you guys so much for watching

Channel: TMIO Tesla

Views: 499,200

Keywords: tesla, elon musk, tesla 4680 battery cell, tesla 4680 is game over, gamechanger 4680 battery cell, model y 2022 with tesla 4680 pack, tesla giga press and structural battery pack, Tesla 4680 will unlock tesla semi cybertruck and $25000 tesla

Id: pff085WDs_k

Length: 26min 14sec (1574 seconds)

Published: Sun Nov 07 2021

Reddit Comments

[u/Zoom566]

Savings of 20% - 30% as Tesla drives down the costs and speed of battery production. LFP battery chemistry, less weight, longer range and designed to last the life of the car.

[u/Zoom566]

Tesla acquires SilLion Inc for a new type of silicon anode. High performance, fast charging 4680…

https://www.google.co.uk/amp/s/electrek.co/2021/11/05/tesla-confirms-acquisition-siilion-battery-startup-new-patent/amp/

[u/Zoom566]

The claims:

56% cheaper manufacturing costs 5x more energy 6x more power 16% more range 5x increase in speed of production 15 min charge time

https://cleantechnica.com/2021/11/01/new-4680-tesla-batteries-vs-solid-state-batteries/

The cost savings suggest the cost of a gigafactory originally circa $7bn now approx $2bn. That’s disruption! The bottom line for KDNC is the significant increase in demand for Li which in turn underscores Ganfeng’s proposed expansion plans for Sonora. Tesla plans initial 4680 cell production starting in 2022 which fits well with Sonora due to enter production in late 2023. The location of the gigafactory close to the mine is crucial to increasing battery production capacity. Tesla Texas is close to Sonora …. Tesla Mexico would be even closer! ;-))