Tesla's secret batteries aim to rework math for EVs, grid
Skip to main content
Sister Publication Links
  • Automotive News Canada
  • Automotive News Europe
  • Automotive News China
  • Automobilwoche
AN-LOGO-BLUE
Subscribe
  • Subscribe
  • Account
  • login
  • HOME
  • NEWS
    • Dealers
    • Automakers & Suppliers
    • News by Brand
    • Cars & Concepts
    • Coronavirus Coverage
    • China
    • Shift
    • Mobility Report
    • Special Reports
    • Digital Edition Archive
    • This Week's Issue
    • GHSP
      Mich. supplier showcases technologies to fight distraction, virus
      Bentley rides fresh product to global sales record
      A show we love to hate ... but hate to miss
      Shoppers to choose how they use digital retail
    • Hyundai Motor Group sets first overseas fuel cell plant in China
      Inside Huawei's push to develop smart roads that talk to driverless cars
      Vehicle production line at GAC-Honda, Honda's joint venture with GAC Motor Co.
      Honda books sales growth in 2020; Nissan slips
      Mercedes-Benz China
      Mercedes, Audi, BMW post record high deliveries for 2020
    • Detroit Aerial Panorama during sunset
      Developing future workers to fuel growth in mobility
      Getting around in Las Vegas often involves long waits for a crowded monorail ride, below, or taking escalators up and down to cross elevated pedestrian walkways along the Strip.
      Las Vegas offers best and worst in transportation challenges
      Where is transportation headed?
      In pandemic environment, RV industry ‘roaring back'
    • Revel
      The moped-sharing startup with thousands of EVs and hundreds of collisions
      ELMS_Headquarters_i.jpg
      EV maker Electric Last Mile to move HQ in suburban Detroit
      Uber logo on a car window
      Uber appeals $59M Calif. fine over sexual assault data request
      Michigan cops go electric with new Mustang Mach-E
    • Elon Musk interview
      Tesla’s Model Y, on sale since March, is a showcase of EV technologies competitors will benchmark.
      Technologies of Electrification
      Cadillac’s Lyriq EV will be unveiled Aug. 6.
      Future Product Pipeline
      A CALL TO ACTION
    • Stronger bottom lines despite 2020 sales dive
      Jeep takes starring role in Stellantis
      Stanton steering NADA amid virus storm
      Brockman case will continue in Texas
    • Access F&I
    • Fixed Ops Journal
    • Marketing
    • Used Cars
    • Retail Technology
    • Sales
    • Best Practices
    • Dealership Buy/Sell
    • NADA
    • NADA Show
    • Automakers
    • Manufacturing
    • Suppliers
    • Regulations & Safety
    • Executives
    • Talk From The Top
    • Leading Women Network
    • Guide to Economic Development
    • PACE Awards
    • Management Briefing Seminars
    • World Congress
    • Aston Martin
    • BMW
      • Mini
      • Rolls-Royce
    • Daimler
      • Mercedes Benz
      • Smart
    • Fiat Chrysler
      • Alfa Romeo
      • Chrysler
      • Dodge
      • Ferrari
      • Fiat
      • Jeep
      • Maserati
      • Ram
    • Ford
      • Lincoln
    • General Motors
      • Buick
      • Cadillac
      • Chevrolet
      • GMC
      • Holden
    • Honda
      • Acura
    • Hyundai
      • Genesis
      • Kia
    • Mazda
    • McLaren
    • Mitsubishi
    • Nissan
      • Infiniti
    • PSA
      • Citroen
      • Opel
      • Peugeot
    • Renault
    • Subaru
    • Suzuki
    • Tata
      • Jaguar
      • Land Rover
    • Tesla
    • Toyota
      • Lexus
    • Volkswagen
      • Audi
      • Bentley
      • Bugatti
      • Lamborghini
      • Porsche
      • Seat
      • Skoda
    • Volvo
    • (Discontinued Brands)
    • Virtual reveals (Sponsored)
      • GENESIS: 2021 GV80
      • KIA: 2021 K5
      • LEXUS: 2021 IS
      • NISSAN: 2021 Rogue
      • TOYOTA: 2021 Venza and 2021 Sienna
    • Auto Shows
      • Detroit Auto Show
      • New York Auto Show
      • Los Angeles Auto Show
      • Chicago Auto Show
      • Geneva Auto Show
      • Paris Auto Show
      • Frankfurt Auto Show
      • Toronto Auto Show
      • Tokyo Auto Show
      • Shanghai Auto Show
      • Beijing Auto Show
    • Future Product Pipeline
    • Photo Galleries
    • Car Cutaways
    • Design
  • OPINION
    • Blogs
    • Cartoons
    • Keith Crain
    • Automotive Views with Jason Stein
    • Columnists
    • China Commentary
    • Editorials
    • Letters to the Editor
    • Send us a Letter
    • Nikon turns lens on auto factory, build quality
      Bosch_information_domain_computer web.jpg
      Bosch, Continental battle to supply the brain of the connected car
      A victory lap for Detroit car design
      Stellantis_logo_blue_background web.jpg
      In 'merger of equals,' PSA is buying FCA, Stellantis prospectus says
    • view gallery
      1 photos
      The Bridge
      view gallery
      12 photos
      Leo Michael's best of 2020
      view gallery
      1 photos
      UAW Deal
      view gallery
      1 photos
      Exit Voluntarily
    • Shifting gears away from the stick shift
      SEMA still a wonderful circus
      Penske still has plenty of races to win
      Ford's turn in the hot seat
    • January 12, 2021 | Automotive industry shined in 2020
      December 8, 2020 | In a year that lacked luster, All-Stars showed how to shine
      November 24, 2020 | Female talent in automotive is expanding
      November 17, 2020 | Automakers are getting creative with vehicle reveals
    • Dave Versical
      Female CMO is new norm
      Daron Gifford
      Biden era holds big promise for future of electric vehicles
      A show we love to hate ... but hate to miss
      Magna car output web.jpg
      Who will build the Apple car?
    • Is sales recovery nearing an end?
      Beijing's uphill battle to boost EV sales
      Nasdaq-like Star Board poised to become key finance platform
      Virus outbreak upends ranks of EV startups
    • Ford's ‘Finish Strong' ad sets right tone for '21
      UAW settlement brings justice, voting rights
      Dealers should be treated as partners in EVs
      Bergstrom Chevrolet-Buick-GMC-Cadillac of Oshkosh donates a new truck to Habitat for Humanity.
      Commitment to safety begets lasting loyalty
    • Is banning ICEs in our best interests?
      GM should share EV risk with dealers
      From Toyota store to hydrogen highway
      Ready to buy Mirai, but where to fuel?
  • DATA CENTER
  • VIDEO
    • AutoNews Now
    • First Shift
    • Special Video Reports
    • Weekend Drive
    • AutoNews Now: Stellantis may reconsider Peugeot's U.S. return
      AutoNews Now: Toyota to pay $180M in U.S. emissions settlement
      AutoNews Now: NTSB to automakers: Improve EV emergency response guides
      AutoNews Now: Cadillac's electric Celestiq teased at CES
    • First Shift: GM said to be considering electric Corvette crossover
      First Shift: Subaru to slow output due to microchip shortage
      First Shift: Trump administration delays increased fuel-efficiency fines
      First Shift: Ford, NADA rethink political donations in wake of Capitol siege
    • N.J. dealer helps position peers for ‘electric revolution’
      DCH Millburn Audi
      'Finding the diamond in the rough': How 2020's No. 1 dealership retains talent
      Don Johnson Motors
      'Distinctive culture' cuts turnover, carves career paths at Wis. dealership group
      Why 2020 could be a record year for buy-sells
    • Why the pickup is the auto industry's 'battleground'
      Carlos Ghosn's quest to restore his reputation
      Why Ford must execute to avoid 'deep trouble'
      Why Honda is 'locked and loaded' for 2020
  • EVENTS & AWARDS
    • Events
    • Awards
    • Congress Conversations
    • Retail Forum: NADA
    • Canada Congress
    • Europe Congress Conversations
    • Leading Women Conference
    • Fixed Ops Journal Forum
    • ANE Shift
    • Shift: Mobility at a Crossroads
    • Shift: The Future of Mobility (CES)
    • 100 Leading Women
    • 40 Under 40 Retail
    • All-Stars
    • Best Dealerships To Work For
    • PACE Program
    • Rising Stars
    • Europe Rising Stars
  • JOBS
  • AN Solutions
  • +MORE
    • Leading Women Network
    • Podcasts
    • Webinars
    • In the Driver's Seat
    • Publishing Partners
    • Classifieds
    • Companies on the Move
    • People on the Move
    • Newsletters
    • Contact Us
    • Media Kit
    • RSS Feeds
    • Shift: A Podcast About Mobility
    • Special Reports Podcasts
    • Daily Drive Podcasts
    • AAM
    • Gentex
    • Reputation.com
    • Ricardo
    • Ricardo
    • Allstate: Want more from your F&I?
    • Ally: Navigating the future of automotive retailing
    • Amazon Web Services: Any place, any time, any channel
    • Amazon Web Services: The power of the cloud
    • Amazon Web Services: Universal translator: Harnessing sensor data to build better automotive software
    • Epic Games: Transforming the auto industry with digital assets
    • FTI Consulting: Crisis as a catalyst for change
    • Google: 5 trends shaping the auto industry's approach to a new normal
    • IHS Markit: Automotive loyalty in the wake of the COVID-19 recession
    • IHS Markit: Autonomous vehicles: Automotive and transportation disruption
    • IHS Markit: COVID-19: The future mobility delusion
    • IHS Markit: The battery electric vehicle (BEV)
    • Level5: 2020 Automotive E-Commerce Report
    • Naked Lime: Bring social reputation together as part of big-picture marketing
    • Wells Fargo Auto: Switching gears from LIBOR to SOFR
    • Ally: Do It Right
    • DealerSocket
    • Deloitte: Cyber everywhere: Preparing for automotive safety in the face of cyber threats
    • Facebook: The road to a zero-friction future
    • Guide To Economic Development
    • PayPal Credit: How consumer financing helps drive sales for online auto parts retailers
MENU
Breadcrumb
  1. Home
  2. China
May 14, 2020 01:32 PM

Tesla's secret batteries aim to rework math for EVs, grid

Norihiko Shirouzu
Paul Lienert
Reuters
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print
    BLOOMBERG

    A Tesla Model 3 at the Beijing auto show in April 2018

    Tesla Inc. plans to introduce a new low-cost, long-life battery in the 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.

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

    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.

    With a global fleet of more than 1 million EVs 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 and Tokyo Electric Power, those sources said.

    The new “million mile” battery at the center of Tesla's strategy was jointly developed with China’s Contemporary Amperex Technology 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.

    Wide rollout

    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.

    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.

    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.

    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 EV 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.

    Related Article
    How Tesla tapped tiny Canadian lab for battery breakthroughs

    Reuters reported exclusively in February that Tesla was in advanced talks to use CATL’s lithium iron phosphate batteries, which use no cobalt, the most expensive metal in EV batteries.

    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.

    The sources said CATL also plans to supply Tesla in China next year with an improved long-life nickel-manganese-cobalt battery whose cathode is 50 percent nickel and only 20 percent cobalt.

    Tesla now jointly produces nickel-cobalt-aluminum batteries with Panasonic at a “gigafactory” in Nevada, and buys NMC batteries from LG Chem in China. Panasonic declined to comment.

    Scale

    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.”

    Tesla has reported operating profits for three quarters in a row, driving a near-doubling of its share price this year. Still, Musk's ambitious expansion plans depend on increasing both profit margins and sales volume.

    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.

    Costs drop

    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.

    Battery expert Shirley Meng, a professor at the University of California San Diego, said NMC cells could cost as little as $80/kWh once recycling and recovery of key materials such as cobalt and nickel is factored in. Iron phosphate batteries, which are safer than NMC, could find a second life in stationary grid storage systems, reducing the upfront cost of those batteries for electric vehicle buyers.

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

    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.

    RECOMMENDED FOR YOU
    Hyundai Motor Group sets first overseas fuel cell plant in China
    Letter
    to the
    Editor

     

     

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    Hyundai Motor Group sets first overseas fuel cell plant in China
    Hyundai Motor Group sets first overseas fuel cell plant in China
    Inside Huawei's push to develop smart roads that talk to driverless cars
    Inside Huawei's push to develop smart roads that talk to driverless cars
    Honda books sales growth in 2020; Nissan slips
    Honda books sales growth in 2020; Nissan slips
    Sponsored Content: How to Perfect the Car Buying Experience at Your Dealership
    Sign up for free newsletters
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    See more newsletter options at autonews.com/newsletters.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    Digital Edition
    Automotive News 1-11-2021
    THIS WEEK'S EDITION
    See our archive
    Fixed Ops Journal
    Fixed Ops Journal 12-14-20
    Read the issue
    See our archive
    CHINA NEWSLETTER: Sign up for commentary by journalist Yang Jian and highlights from top manufacturer and supplier news from China, delivered on Thursdays.
    AUTOMOTIVE NEWS TV WITH TOM WOROBEC: Sign up for our afternoon newscast and catch up on the top news of the day with our brief video roundup.
    Get Free Newsletters

    Sign up and get the best of Automotive News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today

    Get 24/7 access to in-depth, authoritative coverage of the auto industry from a global team of reporters and editors covering the news that’s vital to your business.

    Subscribe Now
    Connect With Us
    • Facebook
    • Instagram
    • LinkedIn
    • Twitter

    Our mission

    The Automotive News mission is to be the primary source of industry news, data and understanding for the industry's decision-makers interested in North America.

    AN-LOGO-BLUE
    Contact Us

    1155 Gratiot Avenue
    Detroit, Michigan
    48207-2997

    (877) 812-1584

    Email us

    Automotive News
    ISSN 0005-1551 (print)
    ISSN 1557-7686 (online)

    Fixed Ops Journal
    ISSN 2576-1064 (print)
    ISSN 2576-1072 (online)

    Resources
    • About us
    • Contact Us
    • Media Kit
    • Subscribe
    • Manage your account
    • Reprints
    • Ad Choices Ad Choices
    • Sitemap
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Automotive News
    Copyright © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • HOME
    • NEWS
      • Dealers
        • Access F&I
        • Fixed Ops Journal
        • Marketing
        • Used Cars
        • Retail Technology
        • Sales
        • Best Practices
        • Dealership Buy/Sell
        • NADA
        • NADA Show
      • Automakers & Suppliers
        • Automakers
        • Manufacturing
        • Suppliers
        • Regulations & Safety
        • Executives
        • Talk From The Top
        • Leading Women Network
        • Guide to Economic Development
        • PACE Awards
        • Management Briefing Seminars
        • World Congress
      • News by Brand
        • Aston Martin
        • BMW
          • Mini
          • Rolls-Royce
        • Daimler
          • Mercedes Benz
          • Smart
        • Fiat Chrysler
          • Alfa Romeo
          • Chrysler
          • Dodge
          • Ferrari
          • Fiat
          • Jeep
          • Maserati
          • Ram
        • Ford
          • Lincoln
        • General Motors
          • Buick
          • Cadillac
          • Chevrolet
          • GMC
          • Holden
        • Honda
          • Acura
        • Hyundai
          • Genesis
          • Kia
        • Mazda
        • McLaren
        • Mitsubishi
        • Nissan
          • Infiniti
        • PSA
          • Citroen
          • Opel
          • Peugeot
        • Renault
        • Subaru
        • Suzuki
        • Tata
          • Jaguar
          • Land Rover
        • Tesla
        • Toyota
          • Lexus
        • Volkswagen
          • Audi
          • Bentley
          • Bugatti
          • Lamborghini
          • Porsche
          • Seat
          • Skoda
        • Volvo
        • (Discontinued Brands)
      • Cars & Concepts
        • Virtual reveals (Sponsored)
          • GENESIS: 2021 GV80
          • KIA: 2021 K5
          • LEXUS: 2021 IS
          • NISSAN: 2021 Rogue
          • TOYOTA: 2021 Venza and 2021 Sienna
        • Auto Shows
          • Detroit Auto Show
          • New York Auto Show
          • Los Angeles Auto Show
          • Chicago Auto Show
          • Geneva Auto Show
          • Paris Auto Show
          • Frankfurt Auto Show
          • Toronto Auto Show
          • Tokyo Auto Show
          • Shanghai Auto Show
          • Beijing Auto Show
        • Future Product Pipeline
        • Photo Galleries
        • Car Cutaways
        • Design
      • Coronavirus Coverage
      • China
      • Shift
      • Mobility Report
      • Special Reports
      • Digital Edition Archive
      • This Week's Issue
    • OPINION
      • Blogs
      • Cartoons
      • Keith Crain
      • Automotive Views with Jason Stein
      • Columnists
      • China Commentary
      • Editorials
      • Letters to the Editor
      • Send us a Letter
    • DATA CENTER
    • VIDEO
      • AutoNews Now
      • First Shift
      • Special Video Reports
      • Weekend Drive
    • EVENTS & AWARDS
      • Events
        • Congress Conversations
        • Retail Forum: NADA
        • Canada Congress
        • Europe Congress Conversations
        • Leading Women Conference
        • Fixed Ops Journal Forum
        • ANE Shift
        • Shift: Mobility at a Crossroads
        • Shift: The Future of Mobility (CES)
      • Awards
        • 100 Leading Women
        • 40 Under 40 Retail
        • All-Stars
        • Best Dealerships To Work For
        • PACE Program
        • Rising Stars
        • Europe Rising Stars
    • JOBS
    • AN Solutions
    • +MORE
      • Leading Women Network
      • Podcasts
        • Shift: A Podcast About Mobility
        • Special Reports Podcasts
        • Daily Drive Podcasts
      • Webinars
      • In the Driver's Seat
        • AAM
        • Gentex
        • Reputation.com
        • Ricardo
        • Ricardo
      • Publishing Partners
        • Allstate: Want more from your F&I?
        • Ally: Navigating the future of automotive retailing
        • Amazon Web Services: Any place, any time, any channel
        • Amazon Web Services: The power of the cloud
        • Amazon Web Services: Universal translator: Harnessing sensor data to build better automotive software
        • Epic Games: Transforming the auto industry with digital assets
        • FTI Consulting: Crisis as a catalyst for change
        • Google: 5 trends shaping the auto industry's approach to a new normal
        • IHS Markit: Automotive loyalty in the wake of the COVID-19 recession
        • IHS Markit: Autonomous vehicles: Automotive and transportation disruption
        • IHS Markit: COVID-19: The future mobility delusion
        • IHS Markit: The battery electric vehicle (BEV)
        • Level5: 2020 Automotive E-Commerce Report
        • Naked Lime: Bring social reputation together as part of big-picture marketing
        • Wells Fargo Auto: Switching gears from LIBOR to SOFR
        • Ally: Do It Right
        • DealerSocket
        • Deloitte: Cyber everywhere: Preparing for automotive safety in the face of cyber threats
        • Facebook: The road to a zero-friction future
        • Guide To Economic Development
        • PayPal Credit: How consumer financing helps drive sales for online auto parts retailers
      • Classifieds
      • Companies on the Move
      • People on the Move
      • Newsletters
      • Contact Us
      • Media Kit
      • RSS Feeds