Elon Musk: Affordable $25,000 Tesla and Better Batteries Are Coming

In a tesla event dubbed battery day elon musk and senior vice president and engineer drew baglino described in detail a plan for a new generation of electric vehicle batteries and it's not a plan that rests on a single innovation some research project that'll never see the light of day it's a plan that has taken creative engineering and industrialization across every facet of what makes a cell into a battery pack from raw material to the finished thing they'll be more powerful longer lasting and produced in-house musk stated that all this will reduce costs and bring the sale price of tesla electric cars closer in line to gasoline-powered cars.

 

Tesla's new larger cylindrical cells dubbed 4860 will provide five times more energy six times more power and a 14 reduction in price per kilowatt hour we are starting to ramp up manufacturing of these cells at our pilot 10 gigawatt hour production facility just around the corner yeah although prototypes are working full production is about three years away according to the presentation in 2018 panasonic battery shortages caused some delays in production at this moment tesla realized that they can't rely on external partners forever they're going to keep existing partners around for a while longer but eventually they're gonna have to do things on their own.

Elon said that tesla will build a new plant in north america reducing supply chain costs and simplifying cathode production tesla wants to do everything in-house to streamline the process from raw materials all the way to the final product production of battery elements is estimated to use 10 times less energy thanks to some manufacturing techniques acquired from maxwell technologies it's also making improvements to the process that would make cathodes 76 cheaper and will also produce zero wastewater combined efforts in streamlining the production line could see a plant with an output of one terawatt hour of energy in a smaller footprint than what a plant that only outputs 150.

 

Gigawatt hours would have more localized production is estimated to reduce the number of miles traveled from transporting materials by 80 further saving costs and emissions and just doing that just localizing our cathode supply chain and production we can reduce miles traveled by all the materials that end up in the cathode by 80 which is huge for cost yeah i mean to be clear cathode production would be part of our the tesla cell production plant so then we should obviously on-site lithium conversion as well which is what we will do using a new process that we're going to pioneer that's a sulfate free process again skip the intermediate with all of these efforts combined tesla expects a 54 increase in range while reducing the cost per kilowatt hour by 56 range increase we're unlocking up to 54 increase in range for our vehicles and energy density for our energy products 56 reduction in dollars per kilowatt hour at the battery pack level.

 

The newer batteries are expected to be in the cyber truck roadster 2.0 and semi-truck vertical integration makes this all possible allowing for more control and customization to make the whole system as efficient as possible an advantage i don't think many other electric car companies have right now tesla is also building its own cell manufacturing facility at its new factory in germany in addition to the new plant in fairmont california tesla is also planning to eliminate the use of cobalt in its cathodes and this is even though tesla's existing batteries use very little cobalt is often mined under terrible conditions that violate human rights the aim is to replace the cobalt with nickel for their higher quality batteries cobalt is also one of the most expensive battery materials so getting rid of it will also reduce costs.

 

Recycling the batteries was also a big part of the plan it was stated that eventually there's not going to be a need to mine new raw materials as recycling existing batteries will have better yield for materials versus mining and at that point we have an awesome resource in those batteries to recycle to make new batteries so we don't need to do any more mining at that point and you can see why the the difference in the the value of the of the material coming back from the vehicle versus the ground you'd always go to the vehicle and we recycle 100 of our vehicle batteries today great yeah i mean to date it's been done by third parties but uh we think we can we can recycle the batteries more effectively especially since uh our batteries we're making the same battery as the thing we're recycling so uh whereas like third-party recyclers have to consider batteries of all kinds.

 

Elon stated that it was critical to reduce the cost of the cars he mentioned that affordability was key to scaling one of the things that troubles me the most is that we don't yet have a truly affordable car and we need to do something about this curve this cur the curve of of the cost per kilowatt hour of batteries is not improving fast enough we give it we've given us a lot of thought over many years to say okay how can we radically improve the cost per kilowatt hour curve while average electric vehicle prices have been decreasing in recent years thanks to changes in battery composition they're still far more expensive than regular cars it's estimated that the battery makes up a third of an electric vehicle's costs some researchers estimate that for electric cars to be as viable as gasoline cars the cost of a battery pack has to be 100 per kilowatt hour tesla's battery packs currently cost 156 dollars per kilowatt hour.

 

As of 2019 so efforts to reduce the cost of batteries is paramount to the long term goal these new batteries by tesla will go towards building a 25 000 electric car uh so uh we're we're confident that long term we can design and and manufacture a compelling 25 000 electric vehicle you know this this has always been our dream from the beginning of the company about three years from now we're confident we can make a very calm very compelling 25 000 electric vehicle uh that's also fully autonomous and when you think about the twenty five thousand dollar price point you have to consider how much how much less expensive it is to own an electric vehicle yeah so actually it it's it it becomes even more affordable at that 25 000 price point he's expecting to have such a car available in about three years.

 

Tesla is usually always behind schedule so maybe we can expect such a car in about four or five years in the long term the company is also targeting an annual production of 20 million vehicles or almost twice as much as volkswagen auto group sold last year and they were the world's best-selling individual auto company so according to musk and drew all of what was said in the presentation is working in principle and on a small scale most of the remaining work involves scaling it was also announced that structural changes would be made to how the cars are actually built batteries will now be part of the car to save space and allow for even more battery cells elon has been teasing a new souped up model s for a while the car will be a step above the ludicrous model the specs are insane it's going to have over 520 miles of range get from 0 to 60 in under 2 seconds and have a top speed of 200 miles per hour in testing around the track laguna seca this new model beat the previous tesla record by 18 seconds the price listed on tesla's website is about 140 000 and is going to be available in late 2021.

 

So in summary this event housed a lot of promises 54 increased range while reducing the cost per kilowatt hour by 56 plus a recyclable supply chain and minimal environmental impact is a tall order it seems optimistic but the tesla team has been proving people wrong for over a decade so if anyone can do it it's going to be them so i'm wishing them all the best because ultimately such efforts are good for everyone though the competition is heating up with lucid air porsche and rivian all making a splash in the electric market but if tesla can do what they say this is going to put them a great deal ahead on the flip side.

Nikola motors seems to be crashing and burning after their concept electric truck was revealed to be rolling down a hill and not actually driving as it was misleadingly implied in an advertisement i'm talking to some people that contributed to a scathing report by hindenburg research it was picked up by cnbc and other financial media it was the very same report that made the ceo of nikola motors resign so please be patient with the production of this episode though do subscribe if you want to see that story so anyway what do you guys think about the tesla announcement are you excited do you think it's feasible to make a 25 000 electric car.