Tesla CEO Elon Musk, during Thursday’s annual shareholder meeting, called himself a “helpful accelerator” for the company’s future, as shareholders approved Musk’s pay package worth $46 billion based on current stock price.
Meanwhile, one aspect is due to the change in the company’s trajectory, cutting costs and allowing everything from Tesla electric car worth $25,000 in 2023 for mass production of the Semi in 2021 has not yet come in 2024: a significant cost reduction for Tesla’s 4680 cells.
“For our cell manufacturing operations, we see a path to cost parity by the end of the year — a very difficult path to cost parity,” Musk summarized. .
The battery date and 4680 aim to halve the cost
While Musk is now talking about cost parity, it’s a very different reality for Tesla’s signature battery production, nearly four years after September 2020’s Battery Day. Tesla turned 4680 cells and their own future production became the focus of that event and announced that they would create breakthrough cells at half the coston a power basis, compared to suppliers — and boast that they can even power other automakers.
Compare 4680 vs 2170 – Panasonic
“Currently, our 4680s cost more than our suppliers,” Musk revealed Thursday, noting the volatility of EV battery prices. “Today they are priced higher than the supplier’s price but lower than the supplier’s price a year ago.”
“There is a bit of something going on with battery suppliers, such as VRAM chips,” he added. “However, we hope to achieve comparable or even lower costs than current supplier battery prices by the end of this year.”
Tesla’s big battery bet has yet to pay off
The cost of EV batteries is truly a roller coaster ride. After a day of using the battery, EV battery prices skyrocket to new heights in 2022, hindering the affordability of electric vehicles. Lithium-ion battery prices have fallen from 2023 to this year but show no signs of stopping. Goldman Sachs analysts now predict almost EV battery prices reduced by 40% from 2023 to 2025, which will boost sales.
Tesla Battery Day – The bigger it is, the lower the cost
In many respects, the economics of EV battery supply look very different from what they appear to be on Battery Day. According to an assessment earlier this spring by Bloomberg New Energy Finance, there is currently a global glut in battery production. If you look at China, China itself currently produces enough batteries to satisfy global electric vehicle manufacturing operations. And in terms of form, no major car company has committed to the 4680 cylindrical shape (diameter 46 mm, height 80 mm). For example, BMW has committed to the 4695 (same diameter 46 mm, 95 mm taller).
Musk said in 2021 that if Tesla does not produce 4680 cells itself, it will not be enough for Semi mass production—a phase of the Semi steep that Musk only confirmed during this week’s event.
In 2021, Panasonic’s top battery executive said Mass production of 4680 cell format will “require new techniques.” But that hasn’t stopped other leading battery suppliers from competing to create the new format.
2025 Tesla Cybertruck – Courtesy of Tesla, Inc.
Tesla’s VP of engineering Lars Moravy gave an update on the 4,680-unit production run during the company’s first-quarter earnings call in April, suggesting a pace of about 7 gigawatt hours per years, enough to stay ahead of the Cybertruck’s production rate, otherwise it’s the only model to use them.
As Musk mentioned, Tesla may soon be on par with other cell and cell manufacturers, but half the cost today is still as far away as it is in 2020.
