Short summary of Tesla Battery Day 2020

The Tesla Battery Day 2020 was much more technical than many of us have expected; wasn't sexy to anyone but engineers, but the statements & plans presented are super critical for the whole EV industry. 

If you want to understand Tesla Battery Day in a simple phrase it's this: How Tesla will significantly improve battery performance and greatly reduce cost.

➡️ Range Increase 54%

➡️ $/kWh Reduction 56% 

➡️ Investment per GWh reduction 69%

Tesla is on a trajectory to half the battery cost 2025. This is truly disruptive (would have considered as mere marketing pitch if it'd come from another company's shareholders meet:). But this is Tesla and Elon who have set impossible targets and made it possible many times in the past. So hopes are really high!

The new cell form factory they would increase range by 16%. It also results in a 14% reduction in cost per kWh — again at the cell form factor level only. The design is only a small part, but the battery manufacturing process optimization has a huge role to play too!.

Tesla unveils plans to manufacture its own ‘tabless’ batteries, calling it: 4680 cells (based on its 46mm x 80mm dimensions). These cells will improve range, and reduce cost in its line of cars. Tesla also plans to build a cathode plant featuring cathode design that is 76% cheaper, less affected by nickel shortages, and will produce zero wastewater. 

End to End, the gains are big. This is not about one big breakthrough, but a careful look at everything to eek out every possible improvement, based of a first principles view point. This is quite evident in the slide below, and strongly emphasized in the presentation.

This is the sort of technology that maybe isn't sexy to anyone but engineers, but it dramatically changes the economics of electric vehicles, and significantly impacts the driving performance. 

Though the proposed tables 4860 battery is not totally a new innovation (infact a logical next step for Tesla), the manufacturing optimization for large scale, it can bring-in is going to be the big differentiator; and very much needed for the mass adoption of EVs. This is an example of solving a problem holistically, rather than piece meal, should yield much bigger total gains, not just for Tesla, but for the whole EV industry. 

I was impressed with the tech at battery day, but I think many were expecting a million mile battery, not a technical pathway to reduce cost by more than 50%. Obviously that detail is boring for many.

However, its this detail that will truly drive future EV sales and continue to push down purchase prices. Its where EVs go mainstream and that drives long term volume and profit. Playing the long game is what counts and here Tesla is miles ahead of other OEMs.

👉 Full video of the Tesla battery day event here (go to 1 hr 40 min)