More Affordable EVs
The producer of electric vehicles announced it’s looking to remove cobalt from its batteries. Elon Musk, Tesla’s founder and CEO, talked about the plans to remove cobalt from its cathodes. Although the carmaker uses very small amounts of cobalt in its current batteries, Musk says he wants to remove it completely.
The main reason is that cobalt is often mined under conditions that breach human rights, resulting in a drive to replace it with other materials. Musk didn’t provide a timeline for when Tesla will eliminate cobalt from its batteries, but he said it would make them substantially cheaper.
“It’s absolutely critical that we make cars that people can actually afford,” he said. “Affordability is key to how we scale.”
The overarching theme at the event was how to make EV more affordable. To this end, Tesla said it plans to produce its own “tabless” batteries that will enhance the range and power of its cars. The batteries will be manufactured in-house and will cut both costs and the sale price of Tesla’s electric vehicles.
New batteries are expected to reduce Tesla’s cost per kilowatt-hour, one of the key metrics for measuring battery packs of electric cars. “Tabless” batteries mean that the carmaker plans to remove the tab that connects the cell and what it’s supplying. These cells, also called 4680 cells, will produce six times more powerful batteries and enhance its range by 16%.
At the moment, Tesla’s battery supplier is Panasonic, and it’s likely to remain that way for the time being. However, Musk has been looking to move battery production in house for a while now. He said that the rate of battery manufacturing at Panasonic has caused delays in the production of the Model 3 and the Model Y.
The founder of SpaceX has also been giving hints on the new Plaid powertrain for some time, a model that will be above the Ludicrous. The Plaid powertrain is expected to have a range between charges of 520 miles, reaching from 0-60 mph in less than two seconds, and a top speed of 200 mph.
On Tesla’s official website, the sale price for the Plaid is $139,990. Musk previously said that Plaid would “cost more than our current offerings.” It will become available on the Model S late next year.
During the battery event, Musk also announced that Tesla is planning to build a new cathode plant for battery production in North America in a bid to cut supply chain expenses and streamline cathode production.
He also mentioned developments in the process of cathode production that will make it 76% cheaper and produce zero wastewater. Tesla is also looking to diversify its cathodes due to low nickel supplies.
It is still unknown where Tesla will build the new cathode plant. However, back in July, when the carmaker announced its new plant would be in Austin, Texas, Musk said he’s strongly considering Tulsa, Oklahoma, for future projects.
Ultimately, after it manages to cut costs of its battery cells and packs, Tesla said it will make a $25,000 electric car. In order to do it, the carmaker will use its new “tabless” battery cells as well as replace the materials in the cell it currently uses, enabling the company to cut the price per kilowatt-hour in half.
Musk has already said he expected Tesla to cut the costs of its electric vehicles significantly. In 2018, he mentioned the $25,000 electric car for the first time and said it would be possible in three years.
Shares of Tesla gapped over 5% lower following the conclusion of the Battery Day event.
During Tesla’s Battery Day event, the carmaker made several big announcements, including its plan to create “tabless” cells to improve the power and range of its vehicles and cut costs per kilowatt-hour. The company additionally announced a new Plaid powertrain and cathode plant in North America, its plan to remove cobalt from its batteries, as well as a new $25,000 electric car.
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Mariliana has an MSC in consumer analytics and business strategy. She has a special interest in fast-moving industries and big data.