The secret behind Elon Musk the goal is to sell 20 million Tesla the year until 2030 lies in his innovation battery technologies.

The good news is that by using larger cells and a new dry electrode coating process, Tesla can cut the cost in half Model Y battery, saving more than 8% off the vehicle’s starting price in the U.S., battery experts associated with the company said.

The bad news is that it’s only halfway there, according to 12 experts close to Tesla or familiar with its new technology.

That’s because the dry-coating technology used to make the large cells in Tesla’s 4680 battery is so new and unproven that the company is having trouble ramping up production to the point where the cost savings are significant, Reuters reported.

“They’re just not ready for mass production,” said one expert close to Tesla.

Still, the strides Tesla has already made in reducing battery manufacturing costs over the past two years could help boost profits and widen its lead over most electric car (EV) of opponents.

Musk’s promised improvements in battery cost and performance are seen by investors as crucial to Tesla’s quest to usher in an era where it can sell at a profit of $25,000 — and have a better chance of meeting its 2030 targets.

Battery systems are the single most expensive component in most electric vehicles, so creating low-cost, high-performance units is key to producing affordable electric cars which can keep pace with internal combustion engine competitors on sticker prices.

Tesla is one of the few major automakers that makes its own battery packs for electric vehicles, and by making the Model Y’s components in U.S. factories, the SUV will remain eligible for U.S. tax breaks when many competing electric vehicles no longer qualify.

Among the 12 battery experts interviewed by Reuters, nine have close ties to Tesla, and three of the nine have studied Tesla’s new and old battery technology inside and out through disassembly.

Tesla did not respond to requests for comment.


Sources predict that it will be difficult for Tesla to fully implement the new dry coating manufacturing process before the end of this year and possibly not before 2023.

Stan Whittingham, one of the inventors of lithium-ion batteries and the winner of the 2019 Nobel Prize, believes that Tesla CEO Elon Musk is too optimistic about the timing of the commercialization of the new technology.

“I think he will solve it, but it will not be as fast as he would like. It will take some time to really test it,” he said.

In August, Musk told shareholders that Tesla would mass produce 4,680 batteries by the end of 2022.

According to experts, Tesla was only able to cut the cost of the Model Y battery by $2,000 to $3,000, which is about half the savings Tesla planned to save on the 4680 battery it introduced two years ago.

But those savings came mainly from the design of the new 4,680 cells, which are larger than Tesla’s current 2,170 battery, they said.

But at the heart of the cost-cutting drive is dry coating technology, which Musk called revolutionary but difficult to execute.

That should provide nearly half of the $5,500 savings Tesla hopes to achieve through reduced manufacturing costs and one-time capital expenditures, according to sources.

Tesla acquired the know-how in 2019 when it paid more than $200 million for Maxwell Technologies, a San Diego company that makes ultracapacitors that store energy for devices that need quick bursts of electricity, such as camera flashes.

Building on Maxwell’s technology, Tesla began manufacturing 4,680 dry cells this year, first in a pilot phase near its factory in Fremont, California, and most recently at its new global headquarters in Austin, Texas.


This technology allows Tesla to abandon the older, more complex and expensive process of wet plating. It is expensive because it requires significant amounts of electricity, machinery, factory space, time, and a large amount of labor.

To coat the electrodes in the wet process, battery manufacturers mix materials with toxic solvents. After coating, the electrodes are dried in huge ovens, and the toxic solvents that evaporate in the process are recovered, treated, and recycled—all of which add to the cost.

With the new technology, the electrodes are coated with various binders with a small amount of liquid, so they do not need to be dried. That means it’s cheaper, faster and less harmful to the environment.

Because of its simplicity, the process allows Tesla to cut capital costs by a third and cut both the plant’s floor space and its energy consumption to 10th that needed for the wet process, Tesla said.

But the company had problems commercializing the process, sources said.

Maxwell developed his dry coating process for ultracapacitors, but the problem with coating electrodes for electric vehicle batteries is that they are much larger and thicker, making it difficult to coat them with consistent quality at mass production speeds.

“They can produce in small volumes, but when they started production in large volumes, Tesla got a lot of rejections, too many,” one source connected to Tesla told Reuters.

Performance was so poor that all the expected savings from the new process were lost, the source said.

If all the potential efficiencies of dry coating and large cells are realized, the cost of manufacturing the Model Y 4680 rechargeable battery should drop to $5,000-$5,500 — about half the cost of the 2170 battery, according to sources.

Rising costs of battery materials and energy pose a risk to those predictions, but Tesla has yet to significantly improve the new battery’s energy density or the amount of power it delivers, as Musk promised.

Still, despite these factors, the savings Tesla expects will ultimately make the 4680 battery “best in class” for the foreseeable future, one source said.


Much of the $2,000 to $3,000 savings achieved with the 4680 battery came from other improvements, and using the larger cells proved particularly effective, experts said.

The volume of 4680 cells is 5.5 times that of 2170 cells. The older cylindrical cells are 21 mm in diameter and 70 mm in height, hence the name. Cells 4680 have a diameter of 46 mm and a height of 80 mm.

With Tesla’s old technology, it takes about 4,400 cells to power the Model Y and there are 17,600 points that need to be welded — four per cell — to create a unit that can be integrated into the car, sources said.

The 4680 battery only needs 830 cells, and Tesla has changed the design so that each cell has only two weld points, reducing welding to 1660 points and resulting in significant cost savings.

The simpler design also means fewer connectors and other components, allowing Tesla to save even more on labor costs and machine time.

Another source of efficiency is the stronger outer shell of the larger cell. Tesla can now bond the cells together with glue into a solid cellular package, which is then bonded directly to the Model Y’s internal body structure.

This eliminates the intermediate step of combining the cells into large modules that are then installed in a traditional battery, the sources said.

By switching to this cell-to-vehicle design, Tesla could reduce the weight of a traditional 1,200-pound battery pack by 55 pounds or more, saving $500 to $600 per pack, one of the sources said.

But mastering dry coating techniques remains the holy grail.

“Scaling up the battery cell has helped a lot in terms of efficiency, but pushing for 50% cost savings per cell overall is another matter,” one of the sources said.

“This will depend on whether Tesla can successfully roll out the dry coating process at the factory.”

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