Ok, I feel like I actually finally do have a crystal ball, of how this industry will
go. Why because we are already there. We have reached EV battery technology. We are seeing
very little now in progress. The industry is what it is. At least for this decade.
Because we are discovering that battery technology,
research and development, takes a really, really long time, and that's just to develop
the actual cell, from there you still have to then go into all the R & D for manufacturing
the cell, and battery. And then after that you have to ramp up the manufacturing, and
then scale up the facilities.
Now we don't know how long Tesla had been working on the 4680 cell, but you can bet
that Elon had some ideas for it early on, but perhaps it might not have gone into proper
R&D until about 2018. The energy density wont be up to battery day numbers until about 2025.
Now that's about 7 years time it took to research a cell and get it into volume production with
desired specifications.
If it takes Tesla 7 years to do that, with over a decade of experience behind them, and
all the best engineers in the world when it comes to cell, battery and manufacturing design
and production. Then yea, my guess is, don't expect anything from anyone else anytime soon.
Perhaps the best chance might be Quantumscape, given the years of necessary research they
are putting into it.
However, the outcome, if it goes well, will
be a more expensive, less energy dense cell than the 4680, except it is solid state. But
Tesla's 4680 will likely be just as safe by then anyway, and cost a lot less to produce.
And of course not at scale until next decade. But hey, maybe it might be better than what
the competition have by that stage. Should be, as there are no other signs of them improving.
Of course even when they can make solid state cells, have they been designed in a way they
can be produced in the 10s or 100s of billions of cells? And has recycling been taken into
consideration. Remember Tesla have to look at this in first principles thinking of how
this company can improve this world forever, rather than making a quick profit.
But we are a long way from solid state batteries
being produced in volume production. [slide 10 battery day]
As for the other alternatives, the technology and processes have pretty much evolved to
where they are as far as efficiency is going to get, and this is what we have. BYD went
in-house with R &D and managed to get about 3% better energy density than CATL's LFP cells,
not a massive break through. The break-through was they had better volumetric density, which
meant they could place more cells inside the battery and thus increase range. This comes
at a sacrifice obviously it costs more, but it reduces the performance and handling of
the car. And this is the innovation that all non-Tesla
EVs have come up with to increase range, stuff more cells into the battery.
We have reached close to the efficiency we can get with LFP and Nickel cells, they have
already evolved. Now legacy autos are trying to work out with large battery manufacturers
how to turn the raw materials into batteries at the lowest possible cost. In order for
them to have a chance to compete in the future of the auto industry.
The only way to actually make a real difference on energy density and cost, along with high
speed production, is to re-invent the entire cell and battery. One specifically designed
for EVs, and obviously Tesla did, and we don't need another video about all the features
of the 4680 cell. All the other cell manufacturers and EV companies, are using the traditional
cell forms and chemistries - in other words expect minimal energy density improvement.
But after Tesla already having a battery line up and running 6 years ago, the stage at which
the legacy EVs hope to be up to by around 2025, with their own battery partnership making
NMC or NCA cells, just like Tesla's giga-nevada. Now Tesla have had 6 years of experience making
those cells already with Panasonic. And Tesla have even made several battery and cell manufacturing
related acquisitions on top of that.
And only now are Tesla actually beginning
production of the 4680. But it looks like it's going to take a little time to get the
cells right. We may need to produce 100s of millions of cells to start seeing some real
difference with some chemistry improvements, whilst they refine the process. But it sounds
like progress will be made quickly. But it could still take 3 to 5 years or so until
we see the progress we expected on Battery Day.
Think how long that would take the competition to catch up. This is similar to TSMC's manufacturing
abilities, and to how their chips have evolved to where they are today, it takes probably
a decade. Yes, it's similar to that precision, that
takes years to refine, which is why you have to start as soon as possible, even if the
energy density isn't even as good as the last version.
So by 2025 or so, legacy autos are ramping up their cell factories, with similar chemistries
to 2170 cells, except prismatic.
Now prismatic is an easier safer form factor
for production, than cylindrical. Cylindrical form factors are better for the actual car
though. I think as a result the Ford Mach E ends up with less ground clearance than
a Model Y. All the competition are pretty much going
with prismatic. Which means they will never able be able to produce cells as fast as cylindrical
production lines. And as for tab-less design, well no chance. This will be one element that
will continue to hold back all competition, in a massive way. You know aside from the
fact it takes probably 3 times longer than Tesla to build said battery factory in the
first place.
Anyway, the competition are likely lacking in power train and electric motor technology.
In other words, very unlikely they will be up to the 2017 Model 3 specs even with their
new cell and battery factories, like for like. But that might be about as good as they could
be, 2017 Model 3 level range. Which is something, especially if they are able to make a profit.
Which is possible with perhaps a $10,000 battery cost saving and perhaps a $5 or 10,000 price
increase, and maybe cutting out the car dealers if they can.
And legacy autos will likely invest in R & D in improving the chemistry, using less cobalt,
and may one day reach Tesla's current day 2170 cell energy density and cost equivalent,
perhaps by 2030. They won't have any revolutionary dry battery electrode or tab-less design and
all those other magic items. They might hope that one day there is a solid state battery
available for them, as if it is their savior, and there probably will be, but it still won't
be anything close to the 4680 cell.
But aside from Tesla, legacy will pretty much
be owning the nickel cell battery market, as in long range electric vehicles. Sure the
Chinese battery manufacturers do make some nickel cells too, but they still suffer from
nickel prices, supply, and it's much harder to manufacturer. The Chinese advantage was
just the fact that they had their patent for LFP. It doesn't mean they can compete with
legacy on nickel cells, or long range EVs, they just had this advantage.
However, the Chinese EVs haven't been investing 100s of billions of dollars into nickel cell
factories. They are going all in on LFP, which is available to the rest of the world this
year, yet they don't seem to be adopting it. Perhaps legacy autos did what they were good
at, marketing research, and found out they have to be offering up to 300 miles of range,
and that was only achievable with nickel. Not only that, any attempt to try long range
with LFP will result in terrible handling and performance, that is off brand for legacy.
They have no choice but to offer vehicles with nickel cells. This will also allow them
to position themselves away from the Chinese, as the long range and well established brands,
over the cheap Chinese short range brands.
Although when charging infrastructure improves legacy autos will also eventually offer LFP
versions, but that may not be for sometime, at least at any scale.
But Battery Day showed us just how inefficient Giga Nevada was, and how expensive it would
be. But legacy autos dont care, they are going to do it anyway. And I am sure Elon is encouraging
them.
Within time they should be able to reduce
some manufacturing costs, but likely going to be left with the old wet slurry electrode
process. In other words, there isn't really some magic cheap battery coming for the competition.
It basically is about what it is. The Chinese are under $100 per kWh for batteries, which
was some magic price point tipping the cost of EVs with ICE, which was so absolutely arbitrary
it meant nothing, but we are there. And legacy claim they can get down to $100 eventually
too, which I am somewhat dubious about. All prices I am talking about are pre-inflation.
I think that as exciting as all these new
battery technologies and results we get under lab conditions are, it's all absolutely moot,
unless it can be scaled up to the extreme. This is all about extreme scaling the most.
There is so much ICE to replace, and batteries are the bottleneck, so we need cells that
can be manufactured at incredible pace. We are talking 10, to possible 100 times eventually,
the speed of giga nevada.
Yes, there are new technologies like sodium-ion and manganese cathodes, but same situation,
they are only relevant if they are scaled to the extreme. Only Tesla scales to the extreme.