We’re going to have to push out the date or attendance will be very low. Maybe do in two parts: webcast next month & in-person event a few months later?

— Elon Musk (@elonmusk) May 15, 2020

Well, Battery Day keeps getting pushed out. For all the people dying to hear Tesla’s plan to scale battery production from tens to thousands of GWh a year, this is pretty lame.

Luckily, Norihiko Shirouzu and Paul Lienert have an amazing exclusive over at Reuters that might help connect some dots for us ahead of the big day. If you’re not into spoilers, this article is not for you.

 Electric car maker Tesla Inc (TSLA) plans to introduce a new low-cost, long-life battery in its Model 3 sedan in China later this year or early next that it expects will bring the cost of electric vehicles in line with gasoline models, and allow EV batteries to have second and third lives in the electric power grid.

Reuters

Wow, what a way to start a story. When the tech Reuters is describing in this opening paragraph comes to fruition, the world will look very different.

The #1 factor holding EV adoption back is that there are cheaper polluting options. People actually like EVs better than polluting cars –– they’re fast, fun, don’t need much maintenance and are cheap to fuel –– but most people still can’t either justify or afford the larger up front cost. If EVs were the same price as polluting cars, almost everyone would choose an EV. In addition, once price parity is reached the political will for more stringent regulations will grow. As EV costs decline, regulations will increase the cost of polluting cars. Pop some popcorn, because this price inversion will turn the global auto market on its head.

The other important factor is the lifespan of the battery: How long can I use this battery before I need a replacement? Today the best EV batteries typically last 300,000 – 500,000 miles before their charge capacity falls too much to be usable in a car. Keep in mind, this doesn’t mean the battery is dead –– it just doesn’t hold as much charge as it used to.

That’s what the last part about batteries having a “second and third life in the power grid” means. After the cells are no longer useful for cars, they’ll be able to be recycled for use in home storage or utility scale storage projects at a very low cost. Not only will this make renewable energy much cheaper, it should also reduce the cost of EV ownership by allowing owners to get some money back for their old battery if they ever need to replace it.

For months, Tesla Chief Executive Elon Musk has been teasing investors, and rivals, with promises to reveal significant advances in battery technology during a “Battery Day” in late May.

Reuters

Someone please freeze me until Battery Day, I can’t wait any longer.

New, low-cost batteries designed to last for a million miles of use and enable electric Teslas to sell profitably for the same price or less than a gasoline vehicle are just part of Musk’s agenda, people familiar with the plans told Reuters.

Reuters

Electric vehicles have already reached price parity with their gas powered competition in some segments, like luxury sedans and SUVs. But with this new technology they should be able to reach price parity on all segments –– and fuel and maintenance savings are just the cherry on top of all that. $100 per kWh at the pack level is generally considered to be the point at which EVs reach price parity with polluting cars.

With a global fleet of more than 1 million electric vehicles that are capable of connecting to and sharing power with the grid, Tesla’s goal is to achieve the status of a power company, competing with such traditional energy providers as Pacific Gas & Electric (PCG_pa.A) and Tokyo Electric Power (9501.T), those sources said.

Reuters

I’m not sure what to make of this paragraph, but it seems like they’re talking about Vehicle to Grid (V2G) technology. This is something Tesla researcher Jeff Dahn has been talking about recently, and would make sense if battery lifespan has increased significantly. If you don’t need to worry about degradation, why not just use your car as a PowerWall? Solar panels on your roof could generate energy, charge your car, and then power your home at night. How does a $0 power bill sound? How about a negative power bill, where the utility actually pays you to store and transport power for them? According to Dahn, that’s what they should do:

The new “million mile” battery at the center of Tesla’s strategy was jointly developed with China’s Contemporary Amperex Technology Ltd (CATL) and deploys technology developed by Tesla in collaboration with a team of academic battery experts recruited by Musk, three people familiar with the effort said. 

Reuters

Lots to unpack here. We knew Tesla had signed a cell supply deal with both LG Chem and CATL, but what Tesla intended to use this cell supply for was unclear. I can’t find a source on this for some reason, but I think CATL recently said that the deal with Tesla was “not just for China”. That’s a pretty intriguing statement. What exactly are Tesla and CATL working on together, using research from Jeff Dahn?

When we talked to Elon in January he told us CATL would be delivering “more of an integrated module” rather than cells, and that the new batteries would be produced in volume by around “the middle of the year”. An integrated module, rather than thousands of cells, would be a dramatic departure from how Tesla has built battery packs for the entire history of the company.

Eventually, improved versions of the battery, with greater energy density and storage capacity and even lower cost, will be introduced in additional Tesla vehicles in other markets, including North America, the sources said.

Tesla’s plan to launch the new battery first in China and its broader strategy to reposition the company have not previously been reported. Tesla declined to comment.

Reuters

Why China first? Maybe because that’s where CATL is based, or that’s where they think they can get the biggest ROI? As a Californian used to getting things first, I hope this detail is wrong or that the tech makes its way to all markets quickly.

Tesla’s new batteries will rely on innovations such as low-cobalt and cobalt-free battery chemistries, and the use of chemical additives, materials and coatings that will reduce internal stress and enable batteries to store more energy for longer periods, sources said.

Reuters

I’m not a chemist, but apparently you can improve the performance characteristics of a battery cell quite substantially just by tweaking the electrolyte additives. Here’s Tesla battery researcher Jeff Dahn talking about it:

Tesla also plans to implement new high-speed, heavily automated battery manufacturing processes designed to reduce labor costs and increase production in massive “terafactories” about 30 times the size of the company’s sprawling Nevada “gigafactory” — a strategy telegraphed in late April to analysts by Musk.

Reuters

30 times the size?!?! Hopefully they mean 30 times the battery output, not 30 times the physical footprint…

Tesla is working on recycling and recovery of such expensive metals as nickel, cobalt and lithium, through its Redwood Materials affiliate, as well as new “second life” applications of electric vehicle batteries in grid storage systems, such as the one Tesla built in South Australia in 2017. The automaker also has said it wants to supply electricity to consumers and businesses, but has not provided details.

Reuters

So maybe now we finally find out what J.B. has been working on –– Redwood Materials is a company he founded. This is an avenue of reducing battery costs I haven’t heard discussed much: reduce, reuse, recycle. I suppose Redwood would help Tesla get the maximum value out of used battery packs, reusing the cells for cheap utility scale storage or just recovering the materials if nothing else.

CATL also has developed a simpler and less expensive way of packaging battery cells, called cell-to-pack, that eliminates the middle step of bundling cells. Tesla is expected to use the technology to help reduce battery weight and cost.

Reuters

Elon eluded to this when he told us that the modules that make up a Tesla battery pack are mostly vestigial, and that the future was going directly from cell to pack with no modules in between. If the modules aren’t swappable anyway, doing this makes sense to reduce weight, cost, and use the available space more efficiently.

Panasonic declined to comment.

Reuters

Yeah, no shit.

Taken together, the advances in battery technology, the strategy of expanding the ways in which EV batteries can be used and the manufacturing automation on a huge scale all aim at the same target: Reworking the financial math that until now has made buying an electric car more expensive for most consumers than sticking with carbon-emitting internal combustion vehicles.

“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.”

Reuters

Zero emissions vehicles that are cheaper and better than polluting cars? I’m very down for this.

A number of the technical advances made by Tesla and CATL in battery chemistry and design originated at a small research lab at Dalhousie University in Halifax, Nova Scotia. The lab has been run since 1996 by Jeff Dahn, a pioneer in the development of lithium-ion batteries for electric vehicles and grid storage.

Dahn and his team began an exclusive five-year research partnership with Tesla in mid-2016, but the relationship dates back at least to 2012.

Among the critical contributions from Dahn’s lab: Chemical additives and nano-engineered materials to make lithium-ion batteries tougher and more resistant to bruising from stress such as rapid charging, thus extending their life.

Reuters

That’s the Canadian guy lecturing in the videos. What a hero.

The cost of CATL’s cobalt-free lithium iron phosphate battery packs has fallen below $80 per kilowatt-hour, with the cost of the battery cells dropping below $60/kWh, the sources said. CATL’s low-cobalt NMC battery packs are close to $100/kWh.

Auto industry executives have said $100/kWh for battery packs is the level at which electric vehicles reach rough parity with internal combustion competitors.

Reuters

Below $60 / $80 a kWh?!?!?! This would mean electric vehicles that are cheaper than polluting cars in every segment –– not just luxury vehicles. it means higher capacity batteries that perviously had unfeasible unit economics. If true, the impact of this breakthrough can not be overstated. It would completely transform the transportation infrastructure that underpins the entire global economy.

In comparison, the new low-cobalt batteries being jointly developed by General Motors Co (GM.N) and LG Chem are not expected to reach those cost levels until 2025, according to a source familiar with the companies’ work.

Reuters

And that’s assuming they’re on time. So much for GM’s big battery breakthrough. Legacy auto is fucked.

GM declined to comment on its cost targets. Earlier this year, it said only that it planned to “drive battery cell costs below $100/kWh” without specifying a timetable.

Reuters

Yes, and pigs will one day fly too. I just can’t specify a timetable on when.

Conclusion

Advances in battery technology will make buying an EV no more expensive than buying polluting cars. Then, you save on fuel and maintenance with every mile you drive. That means almost every new car sold will be an EV.

But what if you don’t need a new car? Autonomy will take care of the other half of the equation. While a lifespan over 1 million miles, these batteries will be great for ride sharing. If you don’t have a car or can’t afford a new one right now, you’ll be able to pay just a few dollars for an autonomous electric ride.

That’s how we transition the world to sustainable transport.

Read the full story at Reuters