[Music] welcome to the tesla economist please hit the thumbs up and remember to subscribe you can follow me on twitter and talk to me on patreon so much has happened with batteries evs and tesla and the world in general since battery day i swear every time i watch summer battery day i pick up something new it really is like an onion with layers of information i thought we could go through battery day again and go over what was said and how best we can infer what it means with what we've learned since also anything else you pick up let me know in the comments below also as we are hopefully about to soon finally get the actual specifications of what this tremendous breakthrough in battery tech has achieved i thought it was a good time to remind us what we're about to finally see firstly we're showing the number of terror hours that is required for batteries and sales to be manufactured every year to replace the current sales of vehicles it's 10 terawatt hours tesla perhaps around 70 gigawatt hours of battery supply in 2021 so tesla's battery supply was around 0.7 of the total batteries required for all vehicles sold to be electric each year and perhaps at tesla's current rate excluding 4680 batteries so solely from their suppliers they may be close to one percent remember i'm only talking about tesla not all ev manufacturers combined on battery day drew says that the average vehicle lasts 15 years so we're talking about 150 terawatt hours to transition the global fleet to electric of course the real question is how long will it take to reach 10 tail hours of batteries a year for vehicles elon has said at the berlin opening tesla alone might reach about one quarter of that in 10 years we might hope that everyone else combined may also be able to reach the same level as tesla alone by that stage but we have no evidence of any plans for anyone else to reach that level yet then we see the same slide for energy elon saying that's a total of 20 to 25 terawatt hours per year sustained for 15 to 25 years to transition the world to renewable energy this is pretty much in line with what elian was saying at berlin aiming for 300 terror hours total we are referring to total here not just tesla hopefully there will be a lot of other companies helping by this stage and billions if not trillions of dollars invested into achieving this remember we're talking 10 to 20 years time to reach this scale and then another 10 to 20 years of maintaining this scale the technology will have hopefully improved drastically by then in all sorts of ways especially given we're going to see about a thousand times more invested into achieving this and it won't stop there either maybe the texas institute of technology and science will come into fruition but even if it doesn't there'll be a lot more people studying about battery engineering and manufacturing and everything related to this massive mission there'll be more labour available to facilitate the transition faster along with more mines opening up and expanding in other words the bandwidth to expansion will increase one major problem is the battery factories do not produce enough output and require an incredibly large footprint relative to output making it not a sustainable path with the previous processes of producing battery sales if gigan nevada was ever complete it might have eventually achieved 150 gigawatt hours and would have been the largest factory in the world by footprint at the time in order to achieve that that's enough for about 2 million vehicles a year or a drop in the ocean the map comes to 35 giga novada size battery factories to reach the 20 terawatt hour a year figure with a cost of 2 trillion dollars and this is the major problem that tesla were trying to navigate around a way of producing a lot more sales in a smaller factory however all legacy orders and competition are still producing sales in this way in fact most of them aren't even there yet they haven't even finished building their giga nevada equivalent factories yet yeah they're really far behind yet some people do like showing me how much ford is investing in battery factories like it means something well this is the reason it doesn't mean anything and why dollar figures aren't the correct figures to be looking at when it comes to battery factories elon talks about how it's not even about the money anyway that's not the scarce resource the world is awash with money the scarce resource elon says is effort there is only so much effort to go around in making these facilities and you have to allocate the effort as efficient as possible there are only so many engineers in the world and it's all hands on deck right now and of course for there to be more evs well they have to be at a price that people can actually afford and elon refers to more affordable sales by a dollar per kilowatt hour and how that will need to reduce as it is the most determining factor in the cost of a vehicle but the problem is the curve for the cost reduction is not reducing fast enough and is actually flattening out meaning the evs will not become affordable for the masses on the current trajectory and that is why we have battery day designing a battery from the ground up using first principles thinking so we go on to working out how tesla are able to reduce the cost per kilowatt hour which was the main focus of battery day but not necessarily the most important aspect but the plan was to half the cost per kilowatt hour of batteries and this cost saving would be starting from where they were at the time with the 2170 sale which is estimated to be around 150 dollars per kilowatt hour therefore we might expect the 4680 cost to get down to around 75 dollars per kilowatt hour you know excluding inflation and everything else we're going through now they're only talking about kilowatt hour here not talking about halving the cost of the battery in other words if they're able to make vehicles with a lot of weight saving then they'll require fewer kilowatt hours of sales which would save the cost of the actual battery further again now testers start going into each individual aspect on how they're able to cut the cost beginning with the cell design the size itself or form factor they show us an example of a cell and use the 2170 version as an example which would also further imply that all these comparisons are based from the 2170 cell we've shown a graph as the optimal diameters for range and cost and you can see the 46 millimeter diameter is kind of the sweet spot hence why it was chosen there were two factors here range and cost therefore cells for energy storage would not need to factor in range and could have form factor designed more suited to their application which is why we expect tesla to make a new form factor for their lfp energy storage cells however when you have a wider diameter cell you do run into other issues one being charging times take longer however tesla are using tablets design and one of the benefits of that despite the larger sale is it doesn't take much longer to charge but it would also appear that 4680 sales will likely have a slightly longer charge time but i think this trade-off is negligible compared to the other benefits the 46 millimeter diameter brings there are lots of other advantages of tablets too simpler manufacturing the line doesn't need to stop and start for each tab and thus can be a continuous assembly line removing tabs is a major breakthrough for production fewer parts and five times reduction in electrical path and that's a big deal it means the distance the electron has to travel is less a shorter pathway in a larger cell meaning despite it being a bigger cell it has more power to weight ratio this is a really big deal and will allow for easier thermal management tablets is a major breakthrough it allows a lot more flexibility in cell design to allow for optimal performance then the all-important form factor that offers five times more energy and six times more power and sixteen percent more range now remember although it has a lot more energy and power it also has five and a half times more volume than 2170 so its volumetric density is lower than the 2170 but volumetric power density is slightly higher but the cells are longer which means they actually only take up four and a half times as much area so the area density is still higher than the 2170 and because these cells are much larger you can fit in a lot more of the jelly roll inside the can relative to the surface area of the can i.e you get more jelly roll for every gram of casing in a 4680 cell thus using less casing reduces weight and results in a 16 range increase now a lot of people say that these battery day advances will take years until they see the full effect and they are likely right they will certainly continue to improve though but the weight saving is felt instantly in these sales they tell us that these are already in the pilot 10 gigawatt hour a year facility in cato road but elon does say it will take a year to reach capacity then elon says the actual production plants will reach in the order of 200 gigawatt hours a year or maybe more over time and i've been estimating 250 gigawatt hours so that aligns but it could take a year to ramp up to that and if tests are hitting 200 gigawatt hours a year by the end of next year just in texas and that's enough vehicles for about 3 million model y long ranges a year tesla could be at a battery production rate sometime next year for enough 4680 sales for 3 million model wise just from texas those sales are made for vehicles from that factory which would therefore imply the factory should have a capacity of 3 million vehicles a year then we move on to the cell factory design which i think a lot of people likely not any regular tv viewers but other people don't seem to understand tesla are trying to scale big to the extreme therefore the design of the factory is paramount in getting it to produce as fast as possible tessa have taken inspiration from other factory designs like printing and bottling in order to work out how they can produce these batteries as fast as possible obviously the tablet design was a great addition to that too as we already mentioned so tessa are doing everything they can think of to be able to produce batteries so much faster this is the reason no one can catch up to tesla yes tessa are ahead in a lot of ways but this is the main one the speed at which they can produce batteries batteries are the limiting factor in growing an ev business whoever can make them the fastest can grow the fastest it's really that simple well not entirely that simple as they will need to also do so at a profit too or else they've just increased the rate at which they go bankrupt that much faster of course it's one thing making a new factory that can make sales at a really rapid rate the other thing is actually making the factory itself if the factory is enormous and takes years to build and costs a fortune then that's also going to create issues in ramping i mean it's not just about how fast you can produce the sales but also how fast you can produce well the machine that makes the machine again this is just another reason why no one else is able to catch up to tesla for lack of better word or perhaps why the rest of the entire industry combined can still not catch up to tesla if anyone comments about chinese cars taking over then you haven't done your research you've just listened to other people's opinions who probably aren't economists anyway this is where the electrode process comes into it the current process being wet and if you can go from a dry mix to coat it would save so many steps and processes in producing sales and as we know this was a major step change for cell processing but if you can achieve the dry battery electrode process it would reduce the footprint by 10 times and use 10 times less power this is another huge breakthrough and they talk about just how truly difficult this process is implying it's going to be so much harder for anyone else or maybe near impossible if any other auto manufacturer wants to start producing millions of evs a year then this is an essential step we then move on to the actual assembly line and the key for this is to accomplish processes whilst in continuous motion think of it like a highway without traffic lights or stop signs this comes to an output of 20 gigawatt hours per production line or seven times the line output when compared to giga nevada the batteries will come off the line seven times faster and if giga nevada is about 35 gigawatt hours a year then this comes to 250 gigawatt hours a year elon and drew go in deeper about just how important manufacturing is and how tesla will become the best manufacturing company on the planet and this is something we continually hear from elon often citing prototypes are easy volume production is hard they have to become exceptional at manufacturing as there are so many batteries and vehicles to make it would have taken centuries to transition the world to renewable energy with the old processors formation is another major step in cell production formation is when you charge and discharge sales to verify the quality formation is 25 percent of the factory investment and tests have new formation processes that reduce costs 86 whilst also reducing the footprint of further 75 with all these improved efficiencies we end up equating to a 10 times smaller footprint of a factory per gigawatt hour generated and the factory itself costs 75 percent less per gigawatt hour and they say there is definitely room to improve beyond that further elon talks about how confident they are that they can hit three terawatt hours before the end of 2030 however since then this may not be quite as likely but possibly within about 10 years time from now admittedly tesla are behind on their progress of the 4680 battery however we have recently seen a massive step with them actually opening the factory in texas which is the most important thing to keep an eye on as an investor okay so far they've explained that this is now a much more simple lower cost and faster way to make cell factories through all these new processes but now we get to the actual chemistry of the cell and how they're able to improve the energy density at the actual cell level or more the jelly roll itself the anode and cathode now the chemistry is what we might see continually improve over time of these batteries and this full effect may not be felt instantly but surely we expect a reasonable improvement from the start the biggest chemistry improvement is in the anode the anode stores the lithium where the battery is being charged the anode is mainly graphite but silicon can store nine times as much lithium than graphite the more lithium you can store the greater energy density you can reach then you'd be forgiven for asking why not make the anode out of silicon then well although it can store more lithium it will expand in size by as much as four times the expansion creates too much stress and the particles start cracking essentially it affects battery degradation instead test the start from the raw silicon and design around expansion the anode previously had silicon in it too but through this process tesla can add more along with the graphite and reduce the cost of the anode to 1.20 per kilowatt hour not adjusted for inflation etcetera whilst also increasing the range by 20 now what does the range increase actually mean does it mean that the sales will have 20 more kilowatt hours with this new chemistry well no 20 more kilowatt hours doesn't equal 20 more range everything else being equal for example the old model 3 standard range with 2170 was only about 50 kilowatt hours with about 260 miles of range and then the additional 30 kilowatt hours or 60 percent more battery for the long range only added about 100 miles more sixty percent more sales equal forty percent more range however those additional sales also weighed a lot more what's so special here is that we're getting more kilowatt hours from what is likely about the same weight due to this enhanced chemistry it is a virtuous circle as it actually means you need fewer cells for the same range which reduces weight again even further resulting in even fewer cells required again so what kind of energy density improvement might we have seen here if that is the case to get 20 more range well it probably is about 20 to 25 percent improved energy density the next chemistry change is in the cathode the cathode is what stores the ions when the battery is discharging they compare three different cathodes iron nickel and cobalt for price and energy density nickel has the highest energy density whereas iron is the lowest cost these costs are not per ton remember but per watt hour and not their actual density is an element nickel is actually more dense than iron but can store more ions current cathodes for lithium ion that use nickel are mixed with manganese cobalt or aluminium tesla's 4680 has a much higher concentration of nickel which is the highest energy density and still a low enough cost for feasibility not only that they also managed to remove cobalt which is expensive and often sourced from the congo which is not economically stable nor particularly ethical this is another major breakthrough high energy dense lithium batteries without using cobalt it is such an advantage whereas everyone else is still at the mercy of unpredictable cobalt that's right all the new legacy factories being built will be making batteries with cobalt in their cathodes obviously lfp doesn't use cobalt either therefore the chemistry improvements add an additional 24 range which could likely be about 30 increased energy density then another 16 increase from the 4680 cell form factor itself we have 40 more range which could be about 50 percent improvement in graphimetric energy density if the 2170 is 260 watt hours per kilogram the 4680 could be 390 watt hours per kilogram with a path to break 400 fyi 400 is the magical number to make electric air travel feasible however with air travel you could justify battery costs at probably 20 times the price and thus improve it even further this then brings us onto tesla's diversified cathode approach the fact that different cathode types are more suited to different applications particularly when you're dealing with scarce resources these high nickel cathodes will eventually be more for the semi-truck roadster and cybertrac as they need the extra energy density and the additional costs can be passed on to the vehicles then we have nickel and manganese cathode now this could possibly be what they're using now in texas as these battery packs are for model wise however elon has said since that they are making the high nickel cathodes elon has also suggested that they may be able to make high manganese cathodes later too that would be an incredible leap forward manganese energy density isn't far off nickel but it's a lot more abundant then we get to the iron cathode aka lfp which is suggested on battery day it will be standard range energy storage and the compact elon has said about 80 of batteries that tesla use will end up being lfp if half of all batteries are for energy storage then that would leave 60 of vehicles still using lfp that is major and we expect tesla to make their own lfp cell in fact it is in this slide where the entire theory of tesla will make a 4680 lfp cell as derived and i encouraged it about a year ago i started making videos on how incredible tesla's 4680 lfp will be until elon said outright there will be no 4680 lfp they will use a different form factor and i hope and expect there to be a battery day part do i expect two lfp form factors one designed around energy storage another for low-cost vehicles tesla want to scale to the extreme but they can only scale as far as there are physically enough elements to reach it if there isn't enough nickel on the planet to achieve this mission then they have to find alternatives luckily there is enough iron then we've shown how inefficient the process is to make the cathode and tesla have found a much better way better for the environment less cost and faster time and i think cathode is now all processed at the new factory in texas as elon goes on to say cathode production would be part of tesla's cell production producing the cathode locally reduces miles travered by 80 percent too of course we then move on to lithium and are told about their new sulfate-free process of extracting lithium from the ground resulting in a 33 reduction in lithium cost now despite all these crazy lithium prices and lithium shortage scares there is a lot of lithium on earth there just aren't possibly enough mines elon was thinking about this a long time ago i would say they have their lithium suppliers sorted for years and years but the expansion they are aiming for isn't going to be at the same rate of expansion the mines are likely to reach therefore it becomes a limiting factor so what a tester going to do or have to do as elon says in a tweet they have to get into lithium mining whatever it takes for this mission there is no giving up no task too big it just needs to be done tesla is not messing around at the end of the day it's minerals out of the ground into a factory and finished product out there's always a way especially with the level of resources and vertical integration this company has in battery day of course we all recall elon telling us just how abundant lithium is everywhere even saying there is enough lithium just in nevada to convert all the us fleet to electric however the mines might just not be opening up fast enough it's possible the government may want to help facilitate lesion mining too we are not short on lithium just need more mines as we are scaling to the extreme and of course we left our favorite to the last the structural battery pack as it's mostly known but as this really is such a profound design let's go over it in detail starting with the fact that you no longer need the structure in the battery pack significant weight saving instantly as much as 10 reduction in mass if you include the castings too that's ten percent of the entire vehicle and given this example is based on a model y and a model y weighs four and a half thousand pounds then that is over four hundred pounds of weight saving that is huge it is the cells themselves that are being used as the structure the cells are glued to the top and bottom sheet the filler for the batteries is also structural adhesive in a honeycomb structure and obviously flame retardant too a honeycomb sandwich with two face sheets this ends up making the structure incredibly stiff this would in turn further improve handling anyway as there is less structure in the pack there is more area to place more sales this is what i recently discussed about catl's new battery pack and them saying they can place more of their prismatic sales into the pack compared to the 4680 sales but tesla can place more 4680 sales in their pack than catl can place prismatic in theirs do you see tesla have freed up more space in their battery pack due to removing the structure as it takes up less room however it goes even further than that due to the improved energy density and weight savings then tesla need fewer cells in the first place which means these cells can instead be placed more in the center of the vehicle compared to the edge why is that a big deal well safety for starters it reduces the possibility that these sales will be impacted in a crash but of course it's tesla the gift that keeps giving having these batteries closer to the center also reduces the polar motion of inertia a classic example of polar motion of inertia is an ice skater spinning around and how when they pull their limbs in towards their body their velocity increases significantly now although this won't increase the velocity of the vehicle it will make for much better weight distribution when the car corners it will just feel better and easier to drive wow i really want to drive a 4680 vehicle the front and rear castings and structural battery pack end up reducing floor space of the car factory by 35 and a 55 reduction in gigawatt hours all of this in total ends up bringing the reduction in dollars to kilowatt hours by 56 i believe that it was currently costing tesla around 150 dollars per kilowatt hour for 2170 batteries that would thus take the cost down to 66 dollars but that might even be at the pack level although there are a lot of people in the community who think this may even come down to under 60 dollars per kilowatt hour but of course before inflation and supply chain issues either way a massive dropping cost then when we put all of this together we have a range increase of 54 now as amazing as that all sounds we don't really know what we're comparing here 54 percent more range compared to what well obviously a model y with 2170 batteries okay sure but are we talking about the kilowatt hours of the 2170 the area space taken in the battery pack of the 2170 or the mass of the 2170 my guess would be the area and i'll tell you why as the chemistry has also changed and improved the density so that every square foot or meter is able to contain more kilowatt hours due to this improved energy density however it does also mean that less kilowatt hours are required for the same range this seems to be something people struggle to get their heads around but yes when you reduce the weight of an ev you get a longer range which would also mean you could reduce the kilowatt hours to get the same range it previously had therefore fewer kilowatt hours will be required to what extent we don't know and if this new standard range well to be honest this new standard range spec doesn't actually fit in with that math the new austin model y has a range of 279 miles which is 50 miles less than the long range but the battery pack is only an additional 13 kilowatt hours in the long range this doesn't stack up and a lot of people have a lot of theories around what is really happening like software limitations empty sales or all sorts of ideas because the numbers aren't adding up anyway surely that will be revealed soon then of course we have the 56 reduction in dollars per kilowatt hour and 69 cost reduction in gigawatt hours this then puts the total cost reduction of sales on a new trajectory which will take a year to 18 months to realize these advantages and battery day was about 18 months ago from the time of this video and we're about to see some of these advantages in the new factory granted we did see the rear casting earlier but to fully realize the advantages it will be about three years or thereabouts so likely sometime in 2023 but we know that the texas factory already has the structural battery pack and 4680 sales so the rest of the progress will likely just be in the chemistry which will evolve over time in the meantime we do get to instantly realize all the benefits of structural pack castings and 4680 batteries which still make a massive difference not to mention likely some chemistry improvements too elon then explains how tesla's progress will speed up as it needs to scale up to the extreme this is elon talking about planning his massive scale up back then but they didn't have any cell design that was feasible to scale up then this is what they've been working on for the last two years or more probably a lot longer actually to create a battery that is actually scalable to the masses or else they could have just expanded the 2170 cell facilities there's a reason that growth has diminished all right and then comes the 25 000 vehicle elon is confident that in the long term tesla can design and manufacture a 25 000 electric vehicle so that was a long term plan and perhaps would be released in the second half of the decade sometime there was also no mention of it being the robo taxi or even a compact just a 25 000 electric vehicle therefore i think the 25 000 vehicle is not the same vehicle that elon is talking about as this dedicated robo taxi wow how cool is all of that and what's even cooler is this is what the new texas factory represents that is what they have achieved there in fact that factory is so impressive it's only a small part of it we will soon finally get the specifications of these batteries and vehicles and the electric vehicle industry will never again be the same thanks for listening please hit the thumbs up and subscribe you can follow me on twitter and talk to me on patreon you
2022-04-19