Tesla’s secret batteries – lifetime, cost, impressive margins

Tesla’s secret batteries – lifetime, cost, impressive margins

22. May 2020 0 By Horst Buchwald

Tesla’s secret batteries – lifetime, cost, impressive margins

New Yok, 22.5.2020

Electric car maker Tesla Inc. plans to introduce a new low-cost, long-life battery in its Model 3 sedan in China later this year or early next year, which it expects will bring the cost of electric vehicles in line with that of gasoline models and allow EV batteries to achieve a second and third life on the grid.

For months, Tesla boss Elon Musk has kept investors and rivals on the line with promises that he will unveil significant advances in battery technology during a “Battery Day” in late May.

New, low-cost batteries designed to last a million kilometers and allow the electric Tesla to sell profitably at the same or lower price than a gasoline vehicle are just part of Musk’s agenda.

With a worldwide fleet of more than 1 million electric vehicles that can be connected to the grid and share power, Tesla’s goal is to achieve the status of an energy company that can compete with traditional energy providers such as Pacific Gas & Electric and Tokyo Electric Power, these sources said.

The new “million-mile” battery, which is at the heart of Tesla’s strategy, was developed in conjunction with China’s Contemporary Amperex Technology Ltd and uses technology developed by Tesla in conjunction with a team of academic battery experts recruited by Musk, three people familiar with the effort said.

Eventually, improved versions of the battery with greater energy density and storage capacity and even lower cost will be introduced in more Tesla vehicles in other markets, including North America, sources said.

Tesla declined to comment on plans to launch the new battery first in China and its broader strategy for repositioning the company.

Tesla’s new batteries will be based on innovations such as low-cobalt and cobalt-free battery chemistry and the use of chemical additives, materials and coatings that reduce internal stress and enable batteries to store more energy over longer periods of time.

Tesla also plans to introduce new, highly automated, high-speed battery manufacturing processes that will reduce labor costs and increase production in massive “tera factories” approximately 30 times the size of the company’s sprawling “Giga Factory” in Nevada – a strategy that was communicated to some Musk analysts by telegram in late April.

Tesla, through its subsidiary Redwood Materials, is working to recycle and recover metals as expensive as nickel, cobalt and lithium, as well as new “second-life” applications of electric vehicle batteries in grid storage systems, such as the one Tesla built in South Australia in 2017. The automaker has also stated that it intends to supply consumers and businesses with electricity, but has not provided any details.

According to a Reuter report published in February, Tesla reported that talks with CATL had progressed far, talks were to use CATL’s lithium iron phosphate batteries, which do not use cobalt, the most expensive metal in EV batteries.

CATL has also developed a simpler and cheaper way of packaging battery cells, called cell-to-pack, which eliminates the middle step of bundling cells. It is expected that Tesla will use this technology to reduce the weight and cost of batteries.

According to sources, CATL also plans to supply Tesla in China next year with an improved long-life nickel-manganese-cobalt (NMC) battery with a cathode made of 50% nickel and only 20% cobalt.

Tesla now manufactures nickel-cobalt-aluminum (NCA) batteries in a “giga-factory” in Nevada together with Panasonic and buys NMC batteries from LG Chem in China. Panasonic declined to comment.

Taken together, the advances in battery technology, the strategy of expanding the uses of EV batteries and large-scale manufacturing automation all aim at the same goal: to revise the financial mathematics that has so far made buying an electric car more expensive for most consumers than sticking with carbon-emitting combustion vehicles.

“We really need to make sure that we get a very steep ramp in battery production and further improve the cost per kilowatt hour of batteries – this is very basic and extremely difficult,” Musk told investors in January. “We need to raise battery production to a crazy level that people today can’t even imagine.

Tesla has posted operating profits for three quarters in a row, nearly doubling its share price this year. Nevertheless, Musk’s ambitious expansion plans depend on increasing both profit margins and sales volume.

A number of the technological advances Tesla and CATL have made in battery chemistry and design originated in a small research laboratory at Dalhousie University in Halifax, Nova Scotia. Since 1996, the laboratory has been headed by Jeff Dahn, a pioneer in the development of lithium-ion batteries for electric vehicles and grid storage.

Dahn and his team began an exclusive five-year research partnership with Tesla in mid-2016, but the relationship will last at least until 2012. Among the critical contributions from Dahn’s laboratory are chemical additives and nanotechnology materials to make lithium-ion batteries more resistant to crushing by stresses such as rapid charging, thus extending their service life.

The cost of CATL’s cobalt-free lithium-iron phosphate battery packs has dropped below $80 per kilowatt-hour, while the cost of battery cells has dropped below $60/kWh, according to sources. CATL’s low-cobalt NMC battery packs cost nearly $100/kWh.

Car industry executives have said that $100/kWh for battery packs is the level at which electric vehicles are roughly equal to the burns.

Battery expert Shirley Meng, a professor at the University of California at San Diego, said NMC cells cost only $80/kWh when recycling and recovery of key materials like cobalt and nickel are taken into account. Iron phosphate batteries, which are safer than NMC, could find a second life in stationary grid storage systems, which would reduce the purchase cost of these batteries for electric vehicle buyers

By comparison, the new low-cobalt batteries being jointly developed by General Motors Co and LG Chem are not expected to reach this cost level before 2025, according to a source familiar with the companies’ work. GM declined to comment on its cost targets. At the beginning of this, it simply said that it planned to “bring the cost of battery cells below $100/kWh” without giving a timetable.

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