Has Tesla Just Solved Its Biggest Mistake?
Has Tesla Just Solved Its Biggest Mistake?
Possibly, but sadly, it's too little, too late.
Tesla’s 4680 battery was meant to be the “killer blow” that would cement their dominance over the EV industry for the next decade. Sadly, the project faced enormous setbacks, delays, and horrific scaling issues, and four years after the 4680 was announced to the world, it has yet to deliver. As such, projects that relied on these batteries, such as the Model 2 and Cybertruck, are behind schedule and way more expensive than promised. But Tesla has just announced it has produced its 100 millionth 4680 battery cell, meaning Tesla is now producing 495,000 4680s per day! This represents a lightning-quick ramp-up in production; in fact, Tesla has actually doubled the total number of 4680s it has produced since June. So, does that mean Tesla has solved its battery nightmare?
Let’s start off with what the 4680 was meant to be. When it was first announced back in 2020, it was designed to use a new larger form factor, cost-saving dry coating production methods, high-performance silicone anodes, and cobalt-free cathodes. This was intended to reduce production costs by 56%, increase EV ranges by 54%, reduce the amount of investment required in battery production lines by 69%, and enable faster charging. Originally, the battery was scheduled to go into production by 2021 and enable the manufacturing of far more capable and cheaper EVs like the Model 2 and Cybertruck, which would cement Tesla’s lead in the EV world.
Now, three and a half years later, the 4680 barely has any of the promised features. It has the larger form factor, and the associated cost savings that entailed, but that’s it. The high-performance cathodes and anodes and the dry-coating production are nowhere to be seen, and they still use lots of cobalt. As such, the 4680 cells that Tesla has produced so far actually have a lower energy density and slower charge time than their previous cells! Consequently, the 4680 is still miles away from reaching its target specifications or costs, and other battery manufacturers now have batteries with better specs for less.
This is Tesla’s biggest weakness. Without cheaper, more energy-dense, and faster-charging batteries, their vicelike grip over the industry has begun to weaken. Just look at the Cybertruck; it costs twice as much as was initially promised, charges slower than was promised, and has a far smaller battery and range. This is almost exclusively caused by Tesla being unable to produce a 4680 with its target price or specs.
As such, all the competitors, from Rivian to Kia, have caught up and now offer better specs for less money.
However, a recent report suggests this might be about to change, as Tesla seems to be on the cusp of unlocking super cheap 4680 batteries.
You see, the dry coating process was the big cost saver. All other batteries use a “wet coating” method, in which the electrodes are coated with a slurry that needs to dry before it can be assembled into a functional cell. This takes up a huge amount of space, uses a lot of energy, and takes an awfully long time. In contrast, dry coating uses power instead of a slurry and uses temperature and pressure to bind the electrodes together. This requires far less energy, takes a fraction of the time, and is remarkably compact. Well, at least in theory.
Tesla could get dry coating to work on a small scale, but as soon as they tried to produce 4680s with dry coating at scale, it would fail and produce so many duds that it was actually more expensive than wet coating. In fact, the machine would regularly break, as the cathode material was so hard and would break the rollers within the machine.
Tesla has been trying to solve this problem for over four years now and has made practically no progress. They have been able to dry-coat the anode, the easier of the two electrodes, but this means they have to run two different electrode production methods, which negates any real cost savings.
Tesla recently announced in its second-quarter earnings report that it had started validation testing of its very first 4680 cells produced using only dry coating in July. This lines up perfectly with the sudden ramp-up in 4680 production, which heavily suggests they have finally cracked dry coating! Overall, dry coating is far more efficient than wet coating; as such, if a factory upgrades from wet to dry, it should be able to produce cells at a far higher rate. Not only that, but Tesla wouldn’t ramp up production like this unless the 4680 had been finally sorted out.
Tesla now has a shot at producing 4680 batteries at its target price of $60, or 42% less than they currently cost.
So, is this enough to take Tesla back to the forefront of the EV world?
Well, no. BYD’s Blade Battery, CATL’s Shenxing Battery, and Zeekr’s Golden Battery meet this price point while having as good as, if not better, charge times and energy density, all while enabling EV ranges of over 600 miles. Quite simply, the 4680, even with the dry coating, is no longer a unique market-leading product.
In fact, it is set to become obsolete in just a few years. Toyota is on track to produce a solid-state battery capable of charging from 10% to 80% in 10 minutes, offering a range of 745 miles and only costing $60 per kWh by 2028. In fact, Nissan, Storedot, and CATL all have batteries with similar specs and prices coming to market at around the same time too.
Quite simply, the 4680 is too little, too late.
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Sources: Inside EVs, Will Lockett, Will Lockett, Auto Evolution, Clean Technica, Electrive, Will Lockett