The 2022 Tesla Battery Update Is Here
Let’s talk batteries. These things are the heart of an electric car. Not only do the batteries determine the range and performance of an electric vehicle, but they also factor heavily into the safety and longevity as well. The batteries are the most expensive part of the car, and they’re the hardest thing to get right.
As usual, Tesla are the industry leaders in solving the battery problem. They’re on a mission to create the largest, most affordable and most sustainable supply chain of battery cells in the world. There’s a lot of work to be done, and we’re still in the very early stages of a long game. So let’s get going.
Tesla’s Battery Approach 2021
Before we move into the future, we can start with how Tesla manages their battery implementation right now, which Elon Musk has freely admitted is not ideal and needs to be streamlined. It’s kind of like a four pronged approach:
The top tier Model S and Model X vehicles still use the oldest battery cell that Tesla designed with Panasonic for the 2009 Roadster, these are referred to as 18650’s. They’re cylindrical cells, 18 millimeters in diameter, 65 millimeters in length. These are lithium ion batteries with a nickel, cobalt, aluminum or NCA chemistry for their cathode - though Tesla have adjusted the chemistry over time to reduce the percentage of cobalt necessary. For example, in the 2012 Model S the average cobalt per battery pack was around 11 kilograms, by 2016 that had reduced to around 7 kilograms average.
The mid tier Model 3 and Model Y Long Range and Performance vehicles use a larger 2170 cell, again, 21 millimeters in diameter and 70 in length. These were developed with Panasonic for the 2018 Model 3. Also using the NCA cathode chemistry, but again reducing the amount of cobalt at the pack level by around 30 percent over the 18650 while improving energy density at the same time.
For the low tier vehicles, the Standard Range Model 3 and Model Y, Tesla has started implementing a new kind of battery cell that is based on a lithium iron phosphate chemistry or LFP in the cathode. This is a departure from the norm in a few ways - this cell was not designed by Tesla or Panasonic, it’s a product from the Chinese battery maker CATL. And this is a prismatic cell design, so it’s shaped like a rectangle, not a cylinder. There is zero nickel or cobalt used in this battery chemistry, that means it has a comparatively low energy density.
The fourth prong of Tesla’s battery approach today is their next generation of cylindrical cells. These were designed exclusively by Tesla without external partners, and Tesla have been making the new cell for over a year now at their own battery factory. This one is called 4680, meaning it has a much wider diameter than the previous cylindrical cell design. The new chemistry uses a lot of nickel, but zero cobalt, while continuing to improve energy density. These cells have yet to be used in any actual production vehicle.
So, the goal for Tesla moving forward is to streamline this battery supply chain down to the point where they are getting the highest energy capacity for the lowest price. That means two of those prongs will be disappearing over time and the remaining two will ramp up to levels of production that we have never seen before in the world of electric car batteries. So let’s go in depth with Tesla’s battery future.
Lithium Iron Phosphate
The lithium iron phosphate or LFP chemistry is pretty new for North American electric cars, but this kind of battery has been used widely in China for a while now, not just by Tesla but also by major EV players like Nio and BYD.
As you can gather from the name, this kind of battery uses iron as its cathode material, and we know that iron is a relatively cheap and very abundant material, there’s iron in your kitchen, your tool shed, your city’s infrastructure… it’s everywhere. And that makes it pretty cheap, which is awesome.
So why haven’t we just been using iron this whole time? Energy density is the real hill to climb. Nickel is unmatched in its ability to create energy dense batteries, but nickel is unstable and reactive, which is why cobalt is introduced to stabilize the chemical structure. That combination leads to a very expensive battery cell. But for the first decade or so of electric vehicle production, we needed that high density to squeeze any reasonable amount of range from the battery packs. No one wants a car that they have to recharge every 100 miles.
But as leading EV makers like Tesla get better and better at working efficiency into their vehicle designs and battery producers get better with their own technology, then we get to a point where LFP starts to look a lot more viable.
CATL are the Chinese suppliers for Tesla’s LFP battery cells right now. And we know that Tesla plans to continue and expand this business relationship into the future, with an order of 45 gigawatt hours worth of LFP cells for the year 2022. That’s enough to build around 700 to 800 thousand Model 3 and Model Y Standard Range vehicles, depending on how many they make of each. And Tesla is going to need that extra supply as they transition the production of all Model 3 Standard Range - now simply known as ‘Model 3’ - vehicles worldwide to LFP, this won’t be exclusive to China anymore.
What’s impressive about the new LFP Model 3 is that it is pretty much indistinguishable from the standard American version with NCA batteries. Tesla has increased the battery pack size from 50 kilowatt hours in the 2170 powered vehicle, to 55 kilowatt hours in the LFP powered Model 3. The 10 percent increase in battery size has equaled nearly identical range - if anything a bit more range - and marginally slower acceleration in the updated vehicle, but it still pulls from 0 to 60 in less than 6 seconds.
And in addition to pretty closely replicating the performance, the LFP cells actually make for a safer battery pack. Because iron is more stable than nickel, it is going to be much less prone to fire or explosion from thermal runaway events that can be caused by something like crash damage. And even more good news, that stability lends to a much longer cycle life than regular lithium ion batteries, so LFP packs should hold up to thousands and thousands of charge cycles, in some cases they might last for millions of miles of driving. Over multiple years of ownership, it’s actually likely that LFP batteries will match and then even exceed the capacity of lithium ion, because the latter chemistry will degrade as it is charged and discharged.
The only downside really is that energy density. That is going to prevent LFP batteries from ever achieving an exceptionally long vehicle range. Elon Musk has said that any amount of range over 300 miles is going to require nickel based cells. Less density means you need more battery cell material in the car and that means more weight. CATL advertise that their LFP batteries carry around 150 watt hours per kilogram, while their nickel cobalt manganese cells are around 200 watt hours per kilogram. In practice, that makes the LFP version of the Model 3 about 100 kilograms or 220 pounds heavier. Though, like we said, there are more efficiencies being found in the design that have nothing to do with the batteries, like frame casting for example - so it’s not an apples to apples comparison. It’s tricky.
But given the massive popularity of the Model 3 Standard Range, it’s obvious that there won’t be any shortage of people who think that 260 miles of range is perfectly acceptable. And those consumers are going to be more than happy with an LFP battery powered Tesla.
4680 Nickel Based Cells
On the other end of the spectrum, there are always going to be folks who are willing to pay more money for more range in their vehicles. And that’s why Tesla will still need to have a viable lithium ion battery with a nickel cathode and high energy density. That’s where the 4680 battery comes into play. This will also allow them to get into making bigger and more powerful vehicles, like the Cybertruck and eventually the Semi.
Tesla is kind of turning the lithium ion battery world on its head with this new battery cell, because not only does it manage to use nickel with no cobalt, it’s also a tabless cell design.
Why don’t we like tabs? Well, for one, adding the tab into the battery during manufacturing causes a big slowdown in the process, because it can’t be done while the cell is in motion, they have to stop, add the tab and restart. If you watch all of these videos of the 4680 production, everything is always moving very fast. And inserting the tab into the cell opens up the possibility for a manufacturing defect. That’s what happened to the Chevy Bolt, GM says that a torn anode tab in the cells made by LG Chem led to a short and a thermal runaway event in some packs that made the Bolt spontaneously combust. And in addition to that, Tesla says that eliminating the tab actually makes it easier for electrons to move around inside the cell. Even though the “jelly roll” that wraps around the diameter of the new cell is much larger and packs more active battery material than the older 2170, the path length for the electrons to follow is actually shorter in a tabless design.
Then there is the cobalt free cathode. The reason we keep talking about the reduction and elimination of cobalt has a few layers to it. It’s not just that cobalt is expensive, it’s just an all around bad mineral to be using. For one, cobalt is toxic to humans - exposure to large amounts will damage your eyes, ears, skin, heart and lungs, there’s also a suspected link to cancer. Most of the cobalt produced in the world comes from The Democratic Republic of the Congo, and the majority of the mining work is done by hand with little safety consideration given to workers who are often slave labour or even children. It’s bad stuff.
And the fact that Tesla can unlock 5 times more energy, 6 times more power and 16 percent more range over their previous 2170 cell without having to use cobalt is pretty amazing.
This battery cell will make its first appearance in a production car next year. This cell will power the Model Y Long Range that will be produced at Giga Berlin and Giga Austin, with deliveries hopefully starting early in the year. Following that, the 4680 will be used in the Cybertruck that will be made at Giga Austin towards the end of 2022. And eventually the Semi in 2023.
From what Elon Musk has indicated, Tesla will eventually transition all of their long range and high performance vehicles over to the 4680 cell. We got a glimpse of what that might look like with the short lived Model S Plaid Plus option - Tesla never said explicitly that this option package included 4680 batteries, but that fact that it was advertised with over 500 miles of range, while the regular Plaid option comes in at less than 400 miles, means there must have been some extreme difference in the battery pack that they had in mind. We can take this as an indication that Tesla vehicles will have at least 25 percent more range to offer in the near future, thanks to this new battery innovation. Tesla’s forecast is to eventually increase their vehicle ranger per kilogram of battery cell by 54 percent and at the same time reduce the cost of batteries per kilowatt hour by 56 percent.
We know that Tesla is serious about producing this new battery cell in very high volumes. Because in addition to their initial production line in California, they are building a 4680 cell factory at the new plant in Germany, with plans for another one at their Texas plant soon to come. And to take manufacturing even higher, Tesla have given the design to their partners at Panasonic, who are now on track to produce their own 4680 cell for Tesla in 2022.
To secure the resources necessary for large scale battery production, Tesla is already working on lucrative deals with international mining companies. They have 42,000 tons of nickel secured from New Caledonia’s Prony Resources over a multi-year contract, in addition to a deal with BHP for Australian nickel that could amount to 18,000 tons per year. For scale there are about 40 kilograms of nickel in an electric car battery pack, that makes about 25 cars per ton of nickel. We also know that Tesla has just inked a three year deal for lithium hydroxide with China’s Gangfeng, the world's largest producer of battery grade lithium.
According to Tesla’s forecasts in late 2020, they saw themselves hitting 100 gigawatt hours of cell production in 2022. That’s probably not going to be the case, just due to all of the delays and complications with the supply chain that have come up over the past year. Elon has tempered his expectations of the battery cell factory in Germany down to over 100 gigawatts of production per year when it ramps up. Adding that there is the possibility, over time, to reach his original vision of 250 gigawatt hours - that would be about equal to the entire global battery production capacity in the year 2020. The long term goal was set at 3 terawatt hours of battery production by Tesla in 2030, that’s 1000 gigawatts in a terawatt. And Elon says that it would take at least 10 years of battery production at 10 terawatts per year to transition the entire planet to electricity. So, that’s the kind of timeline that we’re looking at - the change isn’t coming overnight. But it can happen in a couple of decades if we just stay the course and nothing catastrophic happens in the meantime.
