Tesla Battery Cost Reduction

Tesla presented a battery cost reduction plan in 2020 Tesla Battery Day. The battery cost reduction is all about end-to-end optimization from material selection and manufacturing process to system integration. It’s realistic and practical. A reduction in material costs will be limited if the market demand is steady to some degree. I’m for Tesla’s holistic approach and hence want to summarize it therein.

• Anode materials: Anode is vital to increase battery capacity given volumetric dimensions, and battery manufacturers have experimented with replacing carbon with silicon at a specific ratio. Tesla is not an exception either. Tesla is increasing Silicon to increase 20% with raw Silicon used (as opposed to nanotube technology).
• Cathode materials: Cathode has an n-layered structure, and the ratio of Nickel, Manganese, and Cobalt dictates structural stability and impedance. In particular, Cobalt contributes to structural stability and yet costs a lot. Finding the right recipe for the goal is critical, where Tesla is decreasing Cobalt. Also, recycling technology for cathode materials plays a role in reducing the cost. Tesla’s aim for recycling is to increase Nickel, Lithium, and Cobalt by 20%, 2.7%, and 2%, respectively.
• Jellyroll-type form factor: Telsa has used 18650 cells for early models and is now increasing its diameter and length, ending up adopting two form factors: 2170 and 4680 with multi-tab used. The new form factors contribute to increasing energy and power by 50% and 16%, respectively.
• Manufacturing process from calendaring, winding, and assembly to formation: Each step takes time, and improving assembly lines through automation leads directly to increased yield rate. Telsa aims to achieve 20GWh per line.
• Vehicle chassis casting: No heat treating or coating is necessary with new alloy used.

To sum up, we will expect an increase in the driving range, a decrease in USD/kWh, and a reduction in Investment/GWh.