Tesla built battery plan faces an uphill battle in terms of speed.

Tesla Inc.'s CEO is unlikely to meet lofty ambitions for mass-producing its own new batteries this year.

Saturday, March 12, 2022 | Chimniii Desk

Elon Musk wants to produce cheaper batteries as soon as possible. But, according to industry insiders and analysts, Tesla Inc's CEO is unlikely to meet lofty ambitions for mass-producing its own new batteries this year. Though Musk is known for accomplishing the seemingly impossible, such as making Tesla into the world's most valuable automaker, the hurdles of opening a new facility and establishing a new method of battery manufacturing are likely to be too much for him. The stakes are really high. Battery elements like nickel hit new highs this week due to supply concerns sparked by the Russia-Ukraine conflict, and Musk predicted battery supply constraints for next year in January, making in-house production a vital to growth.

Shirley Meng, a University of Chicago professor who previously worked with Maxwell, a battery technology startup bought by Tesla, said, "He is altering the way battery manufacturing is done." "It's really tough to create at a high rate and on a large scale."

"I believe they will fall short of the 4680 ramp-up over the next year," Gene Munster, managing partner at venture capital company Loup Ventures, said of the next-generation EV battery. Given Tesla's history of new-model manufacturing, Munster believes the company will beat its targets in the long run, but will take it gently at first.

Musk admits that mass-producing the batteries will be tough, but they are vital to his objective of producing less expensive, longer-range electric vehicles that will keep Tesla ahead of a slew of competitors.

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Tesla, like other manufacturers, buys battery cells from Panasonic Corp., CATL, and LG Energy Solution. Musk revealed in late 2020 that Tesla plans to produce its own batteries in order to half the cost of the most expensive component of an electric vehicle.

Tesla's 4680 lithium-ion batteries, which have a diameter of 46 millimetres and a length of 80 millimetres, can store five times the energy of its current smaller 2170 cells. Tesla can utilise fewer new cells for the same amount of energy and driving range, lowering expenses.

Tesla has stated that by the end of March, it will begin shipping Model Y automobiles with larger battery cells. Musk predicted that Tesla would be able to create 100 gigawatt hours of 4680 batteries this year, enough to power 1.3 million cars and more than enough to meet demand at its Texas and German operations.

This year, Tesla is scheduled to deliver approximately 1.4 million automobiles. According to a previously disclosed prediction, the company will produce batteries for around 30,000 Model Y vehicles in 2018, rising to 484,000 in 2024.

DOUBLE CHALLENGE

Tesla's intentions to adopt a new manufacturing technology called dry electrode coating may complicate the process of setting up a battery production.

"Fine-tuning the equipment takes a long time before you can get to volume production," said Caspar Rawles, chief data officer at Benchmark, adding that Tesla will have to enhance the manufacturing process this year to ensure volume production in 2023.

Rawles explained, "Battery production is difficult, even for seasoned suppliers."

In January, Tesla said that it has manufactured the millionth 4680 cell. It didn't disclose how long it took to reach that milestone, but according to Benchmark, 1 million cells would only power 1,200 Model Ys, implying that Tesla still has a long way to go.

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Tesla did not answer to queries about its battery business that were sent to it via email. Tesla Senior Vice President Drew Baglino claimed in January that the company's test battery facility in Fremont, California, is "making considerable progress on the ramp curve," while also installing battery equipment at its planned plant in Texas.

"Our objective is to drive yield quality and cost to ensure we're ready for higher quantities this year as we ramp and next year," according to Baglino.

Tesla intends to beat established battery makers Panasonic and LG to market with 4680s, demonstrating its ambition.

The most difficult challenge for Tesla is that it is developing a new production technique known as dry electrode, which it acquired through its 2019 acquisition of California startup Maxwell Technologies. According to Musk, the factory equipment "There isn't one. It's in the works."

Dry electrode production eliminates a time-consuming and difficult phase in the battery manufacturing process that includes a chemical slurry. It will be cheaper and more efficient if it works, but Musk concedes it will be difficult.

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He told a European battery conference in November 2020, "The really challenging aspect is then scaling up that production and attaining considerably higher dependability and safety with the cells."

Nonetheless, his timetable is regarded as optimistic. It took more than a decade for battery manufacturers to perfect the traditional lithium-ion battery production process.

Musk, who called the Model 3 sedan's mass production as "production hell" few years ago, may face a "Death Valley" start to scaling up the dry electrode method, according to professor Meng, who added that Tesla will overcome the hurdles.

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