By 2030, Elon Musk hopes to build 20 million vehicles annually with the new tesla new 4680 battery.
Elon Musk is looking for better, cheaper batteries as he aims to boost car production.
The automaker is recruiting Chinese and Korean materials suppliers to help lower the cost and boost the energy of its newest battery cells, despite struggling with battery-related performance and production issues that have delayed the launch of its futuristic Cybertruck, according to sources.
Sources say Tesla has tapped China’s Ningbo Ronbay New Energy and Suzhou Dongshan Precision Manufacturing to help trim material costs as it ramps up production of 4680 battery cells in the U.S.
These arrangements have not previously been disclosed.
It is possible for the 4680 ultimately to be the linchpin, rather than a choke point, in CEO Musk’s dream of building 20 million vehicles annually by 2030 if the automaker can work out performance and process kinks.
Tesla and Musk could not be reached for comment.
Tesla has also signed a deal with Korea’s L&F to supply high-nickel cathodes that could enhance the energy density of its 4680 cells, one source said.
It plans to augment its own production with 4680 cells from Korea’s LG Energy Solution and Japan’s Panasonic to ensure future EV production, two sources said. LG and Panasonic will supply cells to Cybertruck, one source said.
In early March, Musk told investors that a shortage of batteries was causing factories to stall.
Later this year, the company will launch its first new model in more than three years with an edgy, stainless-steel Cybertruck.
Three battery options were considered by Tesla to avoid delaying launch again: smaller 2170 cells used widely in other Tesla models, 4680 cells, and less expensive lithium iron phosphate cells, but the EV maker preferred waiting until the 4680 cells were ready.
There have been no details released about Tesla’s Cybertruck battery strategy, including its use of 4680 cells and consideration of other options.
Musk predicted 4680 batteries would not be a “limiting factor for Cybertruck or anything else” in 2022.
Future production plans depend heavily on Tesla’s 4680 cell, named for its external dimensions (46mm diameter, 80mm length). In addition to storing five times as much energy as the 2170 battery it replaces, this cell delivers 16 percent more driving range and is 5.5 times larger than the 2170 cell it replaces.
Several Tesla factories will manufacture versions for use in cars from the Model Y to the Cybertruck, the sources said. However, Musk acknowledged at Tesla’s investor day that the company is still struggling to ramp up production.
Tesla’s impact is underestimated
However, some analysts remain optimistic that Tesla will resolve these issues in the near future.
Tesla’s impact on the global battery industry may still be underestimated, Morgan Stanley said after the investor day.
In September 2020, Musk announced the new cell for the first time.
With his series of innovations, such as a larger cell size and a new “dry” electrode coating process, he promised a 50 percent reduction in cell costs.
As a result of repeated delays in moving the new cell from prototype to full-scale production, the introduction of the long-awaited Cybertruck has been delayed, which was supposed to take advantage of the cell’s potential improvements in power and energy density – advances that are yet to manifest.
It will take time for suppliers to ramp up production.
A pilot 4680 production line is running at Panasonic’s Wakayama factory in Japan, and the company plans to start volume production by March 2024.
Watanabe said Panasonic Energy’s new Kansas battery plant will initially produce 2170 cells, but will eventually move 4680 production to North America.
In the second half of 2023, LG plans to open a new 4680 production line at its Ochang plant in Korea.
Tesla’s first-generation 4680 cells, built at its Fremont, California, factory, failed to meet an energy density target, according to people involved.
While the automaker has been able to dry-coat the anode, the negative electrode, it is still having difficulty dry-coating the cathode, where the most significant gains are expected.
According to Musk and Tesla executives, Tesla has so far been able to manufacture enough batteries for about 50,000 vehicles annually using the dry coating process.
Tesla plans to produce 1.3 million Model Ys in 2020, Musk said.
Tesla executives said it appears likely it will be able to increase 4680 output five-fold by year’s end.
The company can use those batteries for energy storage systems it sells to utilities and consumers if it ends up with too many batteries this year.
In Texas-built Model Ys, Tesla also uses first-generation 4680 cells with wet cathodes in so-called structural packs. The majority of these vehicles use 2170 cells.
Sources said Tesla will use a cathode with more than 90% nickel in the next generation of 4680 cells. L&F is expected to supply that cathode, another source said.
