Tesla plans deep vertical integration of battery supply
By Illya Verpraet2020-09-24T15:18:00
Tesla has revealed a host of production innovations to make lithium-ion battery manufacturing more efficient and reduce costs, including in-house battery cell production, which could cut the miles travelled for the battery production by 80%, and the reduction of the cobalt content of the cathode, which would bring further supply chain savings
At its annual shareholder meeting and battery day event, Tesla revealed a host of production innovations to make lithium-ion battery manufacturing more efficient and reduce costs. Although the premium electric vehicle maker keeps its cards close to its chest when it comes to how exactly it will achieve these innovations, it did announce plans to start its own battery cell production to supplement those provided by suppliers.
Tesla is looking to increase production volumes and to lower the cost of its vehicles, which includes launching a sub-$25,000 car within three years, as EVs still only make up at tiny proportion of the total vehicle fleet worldwide. The company reckons that to convert the whole vehicle fleet to electric would take a battery production capacity of 10TWh/year. Tesla’s current battery factories produce in the range of 15GWh/year, or 0.15TWh, hence why it calls them gigafactories. As a result, the automotive industry will need ‘terafactories’ to produce enough batteries.