Tesla is on the verge of debuting long-lasting, cheaper batteries called the “million mile” later this year or in early 2021. All things going right in these uncertain times of the Coronavirus pandemic, the battery will be launched in Tesla’s Model 3 sedan in China.
The battery is made in partnership with China’s Contemporary Amperex Technology Ltd (CALT). Tesla hopes that these batteries will help lower the cost of electric vehicles compared to internal combustion energy run cars. Tesla Chief Executive Elon Musk has been teasing with promises to reveal significant advances in battery technology during a “Battery Day” in late May. The low-cost batteries on the anvil are designed to last for a million miles of use.
Tesla has a fleet of over one million electric vehicles on roads that are capable of sharing power with the grid. Tesla’s goal is to become a power company, competing with such traditional energy providers as Pacific Gas & Electric and Tokyo Electric Power, reports Reuters. It is believed that the "million miles" battery will be introduced in North America and China, initially. The batteries will utilize low cobalt, chemical additives and coating that will reduce internal stress and enable the batteries to store power for longer stretches, said Reuters.
During an analysts call, Musk had elaborated on the company’s plans to introduce terafactories, about 30 times the size of Tesla's gigafactory in Nevada. Here, the auto company plans to manufacture batteries using processes that are fast, automated and less labor-intensive.
“We’ve got to really make sure we get a very steep ramp in battery production and continue to improve the cost per kilowatt-hour of the batteries — this is very fundamental and extremely difficult,” Musk told investors in January. “We’ve got to scale battery production to crazy levels that people cannot even fathom today.”
To aid the process, Tesla is working on recycling and recovery of metals such as nickel, cobalt and lithium, through its partner company Redwood Materials. It also plans to reutilize electric vehicle batteries in grid storage systems similar to what it did in South Australia in 2017. The plan is to get into electricity supply to consumers and businesses, but no details have been given yet by the company.
Tesla is already in advanced talks with CATL to use its lithium iron phosphate batteries in EV. These batteries do not use cobalt, which is an expensive metal. Secondly, CATL will supply to Tesla with an improved long-life nickel-manganese-cobalt (NMC) battery whose cathode is 50% nickel and only 20% cobalt. Additionally, CATL has developed a method of packaging batteries that eliminate the step of bundling cells; it directly goes from cell-to-pack. This reduces the weight and cost of bundling of batteries.
Presently, Tesla produces nickel-cobalt-aluminum (NCA) batteries with Panasonic in Nevada and buys NMC batteries from LG Chem in China.
In all, Tesla’s plans to realign and redefine the way batteries are manufactured and the effort to replace expensive metals used in manufacturing with more accessible technology, all point to reducing the cost of EVs. CATL and Tesla have been working on these battery innovations since 1996 in a Halifax lab in Nova Scotia. CATLS has been able to bring down the cost of the cobalt-free lithium iron phosphate battery packs below $80 per kilowatt-hour, with the cost of the battery cells dropping below $60/kWh. CATL’s low-cobalt NMC battery packs cost $100/kWh, reports Reuters.
Experts say $100/kWh for battery packs is a feasible price for EVs and makes it competitive with internal combustion run vehicles.
Tesla's capital expenditure of $1.33 billion in 2019 was mainly towards building new factories and the production of new models. Its Shanghai Factory, the company’s newest production unit, has an annual capacity of manufacturing 150,000 Model 3 vehicles.
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