Tesla, at the Kato Road facility, have recently celebrated their one millionth 4680 cell in
January.
Now I think we are supposed to infer this as one million cells total, rather than one
million cells just for January.
Well we also recently had an update on the kato road yield rate.
Seeing some runs as high as 97% yield.
This same source, from Tesla Motors Club, says there are supposedly one million 4680s
stock piled.
Now bear in mind, this is a celebration, Tesla are celebrating this achievement, as if it
is a good thing, and being public about it.
They are not saying, sorry, we are really struggling we have only made one million 4680
cells so far.
Which may indicate this is a great achievement.
Although it is hard for us to really know.
Suppossedly each cell is about 80 watts/hr.
So this would only be around 80 MWh of batteries.
That's megawatts, and we were initially told 100 GWh to be produced this year on Battery
Day.
But surely to this stage they have just been continually testing and refining, rather than
actually stockpiling.
That is what this line is designed for.
The real 4680 production is going to come from Texas.
And one million cells produced, is still a lot of cells, with likely a lot of testing.
And how many vehicles would one million cells reach?
It would seem people expect the 4680 battery pack to have between 860 and 960 batteries.
Which would mean either way, its enough batteries for just little over 1000 vehicles.
This would align in about right, if the 4680 vehicles have low to mid 70 kWh battery packs.
Tesla have made enough 4680 batteries, for perhaps 1100 Model Ys.
Yet we are hoping Tesla will sell over 10 times that many next quarter.
But perhaps the quantity is moot, and not what to focus on here.
Perhaps its the yields, and what Tesla are doing mostly is improving the yield whilst
increasing the production speed.
As for the actual potential production speed, we don't have a clue what it might be capable
of currently, which is what really matters.
Manufacturing one million units of anything will generate a lot of experience too.
But I think it all comes down to making sure that when the Texas 4680 production line comes
online, that it will hit a really high yield.
I may have recalled somewhere that the yield rate for 2170 was only about 90%.
Let me know in the comments if anyone else can validate that.
Therefore a 97% yield would be a big improvement.
Maybe kato road will eventually just serve as a manufacturing test facility more than
anything, and then the changes can be made in Texas, without disrupting the major lines
there.
If Tesla don't have enough 4680 batteries for Texas, it may not effect overall deliveries
as much as you think, the chips could likely be used in other factories.
It doesn't appear that Tesla had a 2170 back up in place for Texas.
We really need to see these 4680s hit some serious volume production soon.
Once we do, and see a good pace at which it ramps, this will increase my conviction much
stronger with Tesla, and I will likely leverage my position further, if any dip appears after
this time.
And knowing Tesla, the chance of that is above 0%.
We don't know how these battery ramps work, what if they double month over month, well
we are dealing with exponentials here.
On top of that we are going to see a huge jump when the 4680 line in texas is online.
I don't know how many investors realize this, but once that machine is online, its a giant
leap for Tesla.
This is probably the single most important event of the year.
It may not move the stock price, but again, it will increase my conviction.
How much of last year have I been saying its all about the batteries, and in particular
the 4680 batteries, at least at this stage.
Batteries are the core product.
Without them there is nothing.
Even if your car accelerates as fast as a rocket.
So any progress on this is really the backbone of the company.
Except for China, Shanghai is its own unique business, different from the rest of Tesla.
Tesla are somewhat just a car company in China to serve CATL's batteries.
No one can make batteries as fast as CATL, no one can make EVs as fast as Tesla, they
compliment each other well.
For the record, I think Tesla can make cars faster than CATL can make batteries.
But what if Tesla did double production of the 4680 month over month, and were at the
production rate of 1m a month for the start of Feb.
Well by June Tesla would have enough batteries for 32,000 vehicles a month.
Which would have meant doubling the run rate 5 times, assuming they even reached 1m a month
run rate.
And 32,000 vehicles a month, is about 1/5 the number of vehicles we are hoping from
there.
The run rate would need to double twice more to be more in tune with the expected capacity
from the vehicles.
Obviously to aid these doubling's of capacity, it will take the Texas 4680 line to come online
and ramp up, because there are some serious numbers required.
We just don't know the exponential level as to which this will ramp up.
Kato Rd only has a capacity of around 10 GWh of 4680 batteries a year, which is only enough
for 140,000.
Tesla do kind of have the advantage of taking more time, due to not delaying vehicles deliveries
because of the chip shortage.
On the other hand, at the end of the day, sometime next year at least, it will be battery
constraints holding them back.
Which does make you think it is worth spending more time in perfecting the manufacturing,
before the batteries are actually needed.
I always say its good to keep an eye on any progress for the 4680 batteries.
We are even hearing now, that some customers are being assigned a VIN from Austin, supposedly
with a delivery date of next month.
We probably didn't expect Tesla to officially start delivering until next quarter.
We just wonder how many vehicles will be delivered until there is more battery supply available.
But it would seem customers who ordered a Model Y Long Range, are being assigned a 4680
version.
Personally I would like some separation between the two version, if you are ordering.
I think Tesla should be charging more for the 4680 version.
But if it's the same price, then it would likely be using fewer batteries, due to improved
energy density, and may only be running at around 70 kWh or something.
We would also expect the specifications on the web site to change too, showing this different
weight.
I think it won't be long now though, until we start getting some real world data and
specifications of the 4680 vehicles, we will finally be able to see just what a job Tesla
have done on the 4680 battery itself, and then we just need them to prove themselves
manufacturing the battery.
And manufacturing is what Tesla plans on leading in.
If we can manufacturer faster, more efficient, lower cost, cleaner, with fewer resources,
then we can make more products for everyone, and improve our living standards.
There are just so many batteries and electric cars to make to replace the world quickly,
it can't be achieved with conventional methods of manufacturing.
It had to be stepped up.
Of course the end product potentially providing significantly more utility, being a Robotaxi,
will also have a more significant impact on global living standards again.
There are a lot of vehicles to make, and a lot batteries.
The 4680 battery will lead the way for sometime, and will likely become the most popular EV
battery in the world by around 2025, maybe 2024 if Tesla can really ramp up, particularly
with the Berlin factory too.
We hear the Berlin factory will supposedly have a capacity of 250 GWh.
Well could Texas be that too, or even more perhaps?
If so, then those two alone would be at around 500 GWh.
I am not sure CATL would reach 500 GWh by 2025.
Then all of Tesla's other partners that also want to make 4680 batteries for Tesla, Panasonic
announce that they plan to start production of 4680 in March 2024.
That's quite some time away, I guess it shows just how advanced and complicated it is into
getting a 4680 production line up and running.
Yea, Tesla really do want a lot of batteries, they have got the entire world making them
for them.
Along with all the mining companies looking for as much nickel and lithium as they can
too.
Tesla needs a lot batteries.
Panasonic are even rumored to be investing $700 million into this 4680 factory.
This is pretty serious.
It could be huge for Panasonic too.
It will be good for Japan at least, as they are likely going to suffer from a collapsing
ICE industry.
Anyway, I guess we will all be keeping up to date with the progress of the 4680s this
year, as it will set the stage for next year, when hopefully things are more aligned for
Tesla, and less constraints.
Yes, I am excited about 2023.