Why the Tesla Battery Day matters for Europe

Why the Tesla Battery Day matters for Europe

Business news |
By Nick Flaherty

The financial markets were distinctly underwhelmed by the Tesla Battery day. After all, it was a tutorial on how to build a battery for an electric vehicle, and that was the point.

Current battery cell manufacturing is struggling to scale – which is why there are huge investments around the world on building more battery gigafactories. Even Tesla’s own 150GWh Gigafactory in Nevada can’t scale, says Elon Musk, Tesla’s CEO (above).

To reach the 120TWh energy requirements in a future of electric vehicles requires a fundamental re-evaluation of the production process, he says. “The goal is TWh, tera is the new giga ,” he said. “We need 100x growth in battery production to transition the global fleet of vehicles to electric.”

This has implications for Europe, which has also been recognised by politicians in the EU.

“For a company that’s growing rapidly its important to reduce the supply chain, having the parts move very quickly though the factory and then ship to the customer is vital. That’s why its important to have a factory in each continent,” he said, highlighting the new factory being built in Berlin, Germany, alongside plants in Fremont, Nevada and Shanghai.

“Berlin is making rapid progress, and the Model Y made in Berlin will be more efficient [than the ones currently built in Fremont, California],” he said. That global manufacturing footprint means that Berlin will also add battery cell manufacturing. “We will be manufacturing cells in Berlin,” he said.

The design of the battery cell design has been tweaked and changed to support new high volume manufacturing processes that are seven times more efficient than today.

This re-engineering drives up efficiencies that are the equivalent of building seven new gigafactories, and highlights Tesla’s strategy. While it continues to work with the large battery cell supplier, it is optimising its technologies and processes to provide the additional volume itself.

“This is a 75% reduction in investment per GWh,” said Musk. “We are able to get in a smaller formfactor than Giga Nevada many times the cell output – 1TWh in less space than 150GWh. This will be production of 100GWh/yr by 2022 a3TWh/yr by 2030 for internal cell production supplemental to what we buy from our suppliers, Panasonic, CATL and LG Chem. We will continue to use them as suppliers.”

But it is not easy to achieve this scale, and Tesla can only do this if it controls the entire production chain, from sourcing the materials to building the cells and the end vehicle.

Tesla uses a German subsidiary to provide the manufacturing equipment. Tesla Grohmann Automation, headquartered in Prüm near the border with Belgium, has also worked with BMW and Daimler but is now a dedicated engineering unit building automation systems for Tesla globally.

“The difficulty of designing the machine that makes the machine is immense compared to the vehicle itself,” said Musk. “It’s at least 10 to 100 times harder to build the factory than the prototype, as manufacturing of new technology is the hardest thing by far. Creating the prototype is perhaps 10 percent of the challenge.”

“The vertical integration with the machine design teams allows us to design the machine to be one machine and remove unnecessary steps,” he said.

One example of this is the ‘gigapress’ that will be used in Berlin to press out the front and back of the Model Y in two sections using Tesla’s own custom aluminium alloy. This will use the new batteries as part of the structure of the vehicle in a fundamental change to the way cars are designed.

“We had to develop our own aluminium alloy that did not require coating or heat treatments and that interfaces to the structural battery. This is quite profound,” he said.

All of this will be incorporated into the Berlin Gigafactory.

All the improvements announced were relatively small, from 5 to 20 percent, and come from going back and re-engineering materials, design and processes from scratch. This is a huge move for the company, and put together, these changes drive down the cost of battery cells, but more importantly, are designed to scale. This is why the changes are profound for the industry and a significant challenge for other battery cell makers.

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