I know I really am becoming the battery economist, it's because as far as I can tell the economics
of Tesla mainly come down to the batteries.
I am sorry if batteries aren't the most exciting topic for all of you, but I am doing what
I can to make them exciting.
Hopefully, the fact that if we can uncover what is happening here before the rest of
the market, might give us an opportunity to leverage our positions, or buy more shares
with more conviction before everyone else catches on, might make it a bit more interesting
perhaps.
Like I have said, this will potentially affect
my investment strategy, I will probably sell some shares to buy more LEAPS.
It's funny, I get people commenting and telling me I am trying to pump Tesla's stock price,
with my LEAPS strategy, like as if I benefit from it or something.
If anything, this strategy would actually hurt Tesla's stock price, as it involves selling
stock.
I mean so few shares, that it would in no way make no difference at all to the stock
price, but I am certainly not pumping the stock.
In fact I should almost be flattered too, for these people to think I am such an authority
that I could even effect the stock price.
No, I doubt my channel has any affect on the stock price.
And no I benefit in no way trying to convince people to buy LEAPS, I don't even promote
any referral links for trading accounts that allow you to buy LEAPS.
All I am doing is sharing my investment strategy with you.
I know a lot of you have a lot of conviction, like me, but limited resources, this is a
way that I find to assist me, and I enjoy all of you sharing your various strategies
with me.
Anyway, I have been thinking more about what
you all tell me.
I love this community and I read just about all of your comments, and reply to a great
deal of them as well, as you probably noticed.
But a lot of you are saying that the 4680 system won't use fewer cells.
Firstly, they obviously use fewer cells, as each cell is much larger, and yes, you all
understand that too, so I am guessing what you really mean is that they will not use
less area of cells.
Which is probably a more accurate way to put it.
I have been talking about how Tesla will keep the 4680 cells closer to the center of the
car, and the outside of the structure will not contain batteries close to the edges.
Thus improving the polar moment of inertia, which is another way of saying the car will
handle and corner that much better.
But then I am hearing a lot of people saying that I don't quite understand, and that Tesla
won't need fewer cells, and I think I can understand where you are coming from, so I
thought I would talk it through.
Firstly we obviously have some weight saving
with the structure, with the battery pack becoming the structure of the car.
Whenever we save weight, then this improves the vehicles range.
If the battery is the same size, then it will travel further with less weight.
Therefore it would be true that if there is a weight saving that the vehicle could travel
an equal distance than before, with a smaller battery, of fewer cells.
Fewer cells also mean there is less weight again, and we get the same benefit.
Tesla have started a virtuous circle of removing cells.
Tesla claim that the cell the vehicle design removes 10% of the total mass of the car,
which is a massive amount.
Ok weight savings are probably the easiest
aspect to get our heads around, but what about the 4680 cell design itself?
We are told that this will increase range 16%.
In the same slide, we are told that the 4680 cell also has 5 times more energy.
The 4680 is a much larger cell, so we would expect a lot more power and energy from each
cell, however, the range is only 16%.
I believe the power and energy figures are comparing the 4680 cell to a 2170 cell, but
the range is an overall figure.
Why would using 4680 cells mean more range then.
This is simply comparing 4680 form factor and size with 2170, it assumes the same chemistry.
Well the volume to surface area ratio is much higher in the 4680 battery, thus reducing
the size of the can that is used per kWh of actual jelly roll.
Therefore, I think that this range increase is coming from the improvement of the cells
weighing less per kWh, due to less actual battery casing being required.
The 4680 cells themselves weigh less per kWh, thus having an improved gravimetric energy
density.
Again, this would then be the same scenario as the structural battery pack, we are seeing
weight loss from the casing, thus meaning the vehicle would have a further range on
the same amount of kWh from a 2170 cell, in the 4680 cell.
This would of course again mean fewer cells are required to get the same range, thus entering
this virtuous circle further.
What's actually interesting is the volumetric density of the 4680 cells is not actually
as high as the 2170 cells.
As in the 4680 cells take up more volume, to create the same amount of kWh, than the
2170, if using the same chemistry.
However because the 4680 is slightly taller than the 2170, the actual area the 4680 takes
up is not quite as much.
In addition to that the fact the 4680 batteries are used as structure, means that there is
more area there for batteries, as you are able to remove the excessive structure.
In other words 2170 has a better volumetric density over 4680, but 4680 has a better area
density over 2170.
In fact I am not sure I have heard people even compare area densities.
but if you are using cylindrical batteries, it probably is an apt comparison.
Of course the fact that the 4680 batteries mean we can remove excess structure means
the batteries can be taller, without affecting ride height or clearance.
This is a common trait with everything we find at battery day.
Everything way this is done, just seems to be better for everything in so many other
ways.
The gift that keeps giving.
Ok, so we have explored the weight saving aspects of battery day.
Now like I said these are all reasons to have fewer cells, but these are all also reasons
to have fewer kWh of battery in the vehicle too.
Remember, if you save weight, and improve range 30%, then you can probably get the same
range with about 30% fewer kWh.
The math doesn't revert back to 30% exactly, but surely you all understand it indicatively
at least.
Then we move on to the chemistry, and I believe
this is where the complexity lies.
Now due to the new battery day chemistry inside the cells, mainly the cathode and anode updates
we are referring to.
They supposedly increase range 24%.
Now I think this is the part that affects the actual all important gravimetric energy
density.
With the new chemistry Tesla are able to get 24% more range from the previous 2170 chemistry.
In that if Tesla simply replaced the chemistry of the 2170 cell, with this new chemistry,
the vehicles should get 24% more range.
Now does that mean if each 2170 got about 10 Wh per cell, then this new chemistry would
get 24% more Wh, or around 12.4 Wh per cell.
No, not exactly.
It just means that the vehicle overall would get 24% more range.
Now when the model 3 standard range was using nickel cells, it was using just a 50 kWh battery,
whereas the Long Range had 75 kWh. 50% more usable kWh for the Long Range, yet a range
difference of about 90 miles, 263 miles vs 353 miles.
Granted the long range has dual motors and an additional power train, extra weight and
more performance, all of which affects range too.
But even removing all of that, it would appear that you need more than 24% more batteries,
to get 24% more range.
This would imply that the actual gravimetric energy density of 4680s would be higher than
24% with the new chemistry, compared to the 2170 batteries.
Perhaps at a guess at around 33%.
In fact Elon has even hinted that Tesla could improve energy density as much as 50% when
compared to the 2170 cells.
If the 2170 cells are at 260Wh/kg, then this new chemistry could take it closer to 350
Wh/kg, and then if we add the cell design, then it probably is 50% improvement in energy
density at around 390 Wh/kg.
He did say this could take 3 or 4 years as well, which is still 1 or 2 years away.
It may take a little time to perfect the chemistry and get the yields and results we are hoping.
But the weight advantages of the structural battery packs, and 4680 cells should be felt
immediately.
Anyway, this chemistry would mean that each cell does have a high kWh within the same
space.
Which again would mean that fewer cells will be required to generate the same amount of
energy.
And again, if we have fewer cells, then that also saves further weight, and in turn means
that we need fewer cells to get the same range.
More of Tesla's virtuous circle of weight reduction.
I hope that clears it up for you, and why
I think the 4680 may use fewer cells to reach the same range.
This was also what Elon was talking about on battery day.
I can't believe how many times I watch battery day or clips and still take away something
from it.
The best analogy is it's like an onion, and there are just layers and layers of information
you can take away from it.
It was absolutely mind blowing back then, but it's still impressing me again and again
to this day.
I just can't believe we are actually going to going to get to see these 4680 vehicles
very soon.