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(Reuters) – It’s a time of crisis at Tesla Inc, as Elon Musk tries to crack the code for making better, cheaper batteries.
The electric-vehicle maker is recruiting Chinese and Korean material suppliers to cut costs and boost energy from its latest battery cells, even as the company struggles with battery-related performance and production issues that have delayed the launch of its futuristic Cybertruck, people familiar said. are with the plans.
Tesla has called on China’s Ningbo Ronbay New Energy and Suzhou Dongshan Precision Manufacturing to help reduce material costs while ramping up production of 4680 battery cells in the United States, according to the sources, who asked not to be named.
The details of these arrangements have not been previously reported.
If the Austin, Texas-based EV maker is able to work out the performance and process kinks and meet its ambitious production targets, the 4680 could ultimately be the lynchpin — rather than the bottleneck — in CEO Musk’s dream to build 20 million vehicles annually by 2030.
Neither Tesla nor Musk could be reached for comment.
As part of its efforts, Tesla also signed a deal with Korea’s L&F Co to supply high nickel cathodes that could increase the energy density of its 4680 cells, one of the sources said.
The automaker is aiming to increase its own production with 4680 cells from LG Energy Solution of Korea and Panasonic of Japan – an insurance policy to secure future EV production, two of the sources said. LG and Panasonic are expected to provide cells for Cybertruck, one of the sources said.
A shortage of batteries means “factories are stalling,” Musk told investors in early March.
The new battery is expected to play a key role in the launch of the tough, stainless steel Cybertruck, the company’s first new model in more than three years, at the end of this year.
Tesla had considered three battery options to ensure the launch isn’t delayed again: smaller 2170 cells commonly used in other Tesla models, 4680 cells, and lower-cost lithium iron phosphate cells, but the EV maker preferred one waiting for the 4680 cells to be ready, the sources said.
Details about Tesla’s Cybertruck battery strategy, including using 4680 cells and considering other options, have not been reported.
In 2022, Musk said he didn’t expect 4680 batteries to be a “limiting factor for Cybertruck or anything else.”
The Tesla-designed 4680 cell – so named for its external dimensions (46mm diameter, 80mm length) – is crucial to future production plans. Tesla plans to make versions at plants in Texas, California, Nevada and Berlin for use in vehicles from Model Y to Cybertruck, the sources said.
But Tesla is still struggling to ramp up the first wave of production, Musk acknowledged at Tesla’s Investor Day on March 1.
‘TESLA UNDERESTIMATED IMPACT’
Despite the immediate problems, some analysts remain optimistic that Tesla will solve these problems.
“While execution risk remains and many details are unknown, Tesla’s impact on the global battery industry can still be underestimated,” Morgan Stanley said after the investor day.
Musk first announced the new cell on Battery Day in September 2020. At that event, he promised a 50% reduction in cell costs through a series of innovations, from increased cell size to a new “dry” electrode coating process that would reduce the size and cost of a battery factory while improving cell performance.
Repeated delays in moving the new cell from initial prototype stage to full production have also pushed back the introduction of the long-awaited Cybertruck, which was designed to take advantage of the cell’s potential improvement in energy density and power — advances that have been made to date. made materialize.
But it will take time for suppliers to ramp up production.
Panasonic has a pilot production line for the 4680 at its Wakayama factory in Japan and plans to begin volume production later in the fiscal year ending March 2024.
Shoichiro Watanabe, chief technology officer of Panasonic Energy, said last month that the company’s new battery plant in Kansas will initially focus on 2170 cells, but will eventually move production of 4680 to North America.
Last year, LG said it planned to open a new 4680 production line at its Ochang factory in Korea in the second half of 2023.
Tesla’s first-generation 4680 cells, built at its Fremont, California, plant, failed to meet an energy density target, those involved say.
The automaker has so far succeeded in dry-coating the anode — the negative electrode — but is still having trouble dry-coating the cathode, where it expects to make the biggest gains, the sources said.
Tesla’s effort to ramp up production of the dry coating process has so far resulted in enough batteries for only about 50,000 vehicles a year, Musk and company executives said.
In 2020, Musk said Tesla would have enough 4680 capacity in house to ship 1.3 million Model Ys.
While executives said it looks likely that Tesla will be able to quintuple production of 4680 by the end of the year, the company is hedging.
Musk is betting that if Tesla gets too many batteries this year, that’s a good problem. It can use that for the energy storage systems it sells to utilities and consumers.
Tesla has also installed first-generation 4680 cells with “wet” cathodes in so-called structural packages in Texas-built Model Ys. A majority of those vehicles use the older 2170 cells.
Tesla plans to use a cathode with more than 90% nickel in the next generation of 4680 cells, two sources said. L&F is expected to be one of the suppliers of that high-nickel cathode, another source said.
(Reporting by Zhang Yan in Shanghai and Hyunjoo Jin in San Francisco; Additional reporting by Norihiko Shirouzu in Austin, Texas, and Daniel Leussink in Tokyo Additional reporting by Paul Lienert in Detroit Edited by Ben Klayman and Matthew Lewis)
