Tesla’s battery day ended with no battery and a lot of unanswered questions

Tesla’s battery day has come and gone, leaving many experts scratching their heads over what they saw. Instead of the anticipated “million mile” battery we got a series of plans: a plan to manufacture Tesla’s own battery; a plan to process the raw materials; even a plan to mine its own lithium.

And while some of those plans sounded genuinely impressive, some experts were left with the impression that Tesla was headed into uncharted waters without a clear sense of direction.

“I came out of it with a confused message about what they’re doing with the [battery] supply chain,” said Vivas Kumar, Tesla’s former battery supply chain manager and currently a principal at Benchmark Mineral Intelligence, during a post-battery day webinar.

The Verge reached out to a battery researcher, an automotive expert, and a rare earth mineral supply chain analyst to get a clearer picture of what Tesla’s battery announcements actually mean. After watching the event, we were left with a question: How real is any of this?

Musk’s announcement that Tesla was going to start mining its own lithium, in particular, struck Chris Berry, president of House Mountain Partners and an analyst who focuses on energy metals supply chains, as especially ill-advised. Not because it would be impossible, but because it would be extremely difficult — not unlike landing a rocket on an autonomous barge in the ocean.

“I personally think that it’s a terrible idea,” Berry said. “I don’t care what Tesla is, a car company or a technology company. I know that’s a big debate. It’s a terrible idea for a company like Tesla, or VW or BMW or whoever, to get into mining because it’s a radically different business.”

Musk announced that the company had taken the first step of expanding into mining by securing the rights to a 10,000-acre lithium clay deposit in Nevada. The mine, along with a new North American-based cathode manufacturing facility, would be two new additions to Tesla’s growing lineup of factories and operations.

But there’s one problem with that, Berry said. “There has never been any commercial production of lithium from clay sources,” Berry said.

Most of the world’s lithium comes from two places: lithium brine deposits in South America’s “lithium triangle” of Argentina, Chile, and Bolivia; and hard-rock deposits in Australia. Those processes are well understood, Berry said. The same can’t be said for Musk’s position that lithium can be extracted from clay deposits in Nevada using only water and salt.

“I turn that question around and I say, ‘Well geez, if it was this easy to find a domestic source of clay-based lithium, and just used everyday materials like water and like salt to produce commercial battery-grade quantities at scale, why haven’t we been doing this all along?’” Berry asked.

Musk acknowledged Tesla was in uncharted territory. “Nobody has done this before to the best of my knowledge,” he said during battery day. But his explanation of the process left a lot unexplained. “We take a chunk of dirt in the ground, extract the lithium, and put the chunk of dirt back where it was,” he said. “It will look pretty much the same as before.”

There are several companies in Nevada that are attempting to mine lithium from clay, for example Lithium Americas. But they haven’t seen much success yet because they haven’t raised the funds, nor secured the permits, to begin the actual mining process. The typical lithium mine, from discovery to production, can take seven to 10 years to become fully permitted, Berry said. Musk didn’t offer a clear timeline on getting this mining operation up and running.

“This isn’t some weird kind of black box secret thing: ‘God, we don’t know how to produce lithium from clay,’” Berry added. “It’s just a question of economics and permitting.”

Investors were underwhelmed with battery day as well. Tesla’s stock price began to dip as soon as Musk said that some of the innovations showcased at the event were “close to working” and some were three years away from fruition.

The vision Musk outlined on battery day was less about reimagining batteries, and more about reimagining manufacturing, according to Shashank Sripad, a battery researcher at Carnegie Mellon University.

“There were no big surprises in battery materials or design, but quite a few interesting things in manufacturing and engineering,” Sripad said. “It was as much a manufacturing day as it was a battery day.”

Musk announced that by cutting the cost of batteries by more than half, Tesla would be able to make an electric car that costs the same as or less than a combustion engine vehicle. He promised a “$25,000 electric car” in three years — though this is not the first time he has made this exact promise. In a 2018 interview with YouTuber Marques Brownlee, Musk said, “I think in order for us to get up to ... a $25,000 car, that’s something we can do. But if we work really hard I think maybe we can do that in about three years.”

Some of the things Musk announced, like the new “tabless” battery cell, larger cells for more energy capacity, and a new, module-less battery pack design integrated into the body of the vehicle, are “simply engineering challenges” that Tesla is equipped to solve, Sripad said. There is an established body of research confirming Tesla’s approach to manufacturing cheaper, more efficient battery cells. All the company needs to do is scale up the process to make it happen.

Maybe that’s why Musk also said Tesla would “not reach serious high-volume production” on its new battery-making process until 2022.

Musk also announced a future battery design that would be structurally integrated with the car. This could make for a stronger, longer-lasting, and more cost-efficient battery. He compared it to design changes in airplanes, in which the wings of a plane have evolved to become essentially a repository for fuel — though, like other portions of the presentation, Musk was short on details on the new structural design.

Sam Abuelsamid, an automotive expert at Guidehouse Insights, said a better analogy would be consumer electronics, like phones and laptops. By eliminating the packaging required for a removable battery, electronics makers could stuff more battery cells in the same volume. But that can come at the expense of making future repairs.

Abuelsamid speculated that this could result in a “stronger” battery, but also one that is “completely non-serviceable.” He noted it’s more difficult to repair a bad cell or faulty connection when everything is bonded and sealed in the battery pack. “You basically have to scrap the whole thing,” he said, “which is not desirable. I don’t think we are yet at the stage of battery evolution where this would be a good idea.”

This isn’t the first time Musk laid out a bold vision without a clear path to realization. During Tesla’s autonomy day event in 2019, Musk said that by the middle of 2020, Tesla’s AI technology will have progressed to the point where drivers won’t have to pay attention to the road anymore. He also predicted there would be a million self-driving Tesla cars on the road by this year as part of a massive ride-sharing experiment. Neither of those things came to pass.

Battery day was more muted, and that’s probably why investors came away disappointed and Musk stans found themselves struggling to find the excitement. In addition to tamping down expectations before the event, Musk was uncharacteristically realistic about the challenges Tesla will face as it attempts to vertically integrate mining and battery production into its manufacturing process.

“I mean to be clear, I would not like to say that it’s totally working,” Musk said during the event. “It’s close to working, but it’s not even now at the pilot plant level. It is close to working well, I could say. It’s fair to say probably it does work but with not a good, not a high yield.”

Tesla’s battery plans may not be operational yet, but the intention of those plans is just as important as the execution, said Kumar, the former Tesla battery manager who now works at Benchmark. Maybe even more so.

“Don’t underestimate this company,” Kumar said during the webinar. “Every single time Tesla has been counted out, they have been able to rise above it. But that said, it’s less about the promises made by Tesla, than the inherent limitations of physics when it comes to lithium ion batteries, when it comes to mining, that will dictate what the future will hold over here.”

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Comments

Aesthetic, your musk-hate invalidates any comment you make.

Looking at Tesla cars, the overall QC is still lacking. I visited a showroom recently and the panel gaps, misalignment and defects that were visible is still a major problem. Obvious issues on the rear quarters and around light clusters is painful to see – this QC issue really puts me off buying one. I live in a sleepy village in the UK, a friend recently purchased an S and from new there’s been a significant boot leak. Water ingress was such an issue that its damaged items stored inside. One rear passenger door looked like it had been bodged into the opening with a gap along the bottom cill big enough to fit your thumb in. Despite these problems he loves it but this is where I fear that Telsa doesn’t have parity with other European automakers. Yes in other areas I know it’s lightyears ahead, but for someone like me, it’s just too OCD triggering.

I got a model Y and after all the news of panel gaps and quality control, I went through it like a fine tooth comb and I was ready to reject it. And sure enough, panel gaps and crumpled storage liner. Tesla guy said to take a picture and mobile mechanic will come by. With that I said it was not that bad, so I took it. The mobile guy came by and replaced the liner, but said nothing can be done about the panel gap because it was within spec. I was a bit miffed, but OK because it wasn’t noticeable unless you look super closely. Last week I was walking around downtown and looked at a Mercedes and saw panel gap worst than mine. WTF! I looked at another Benz with the same gap issue. I started looking more at other manufacturers panel gaps and I see them. Long story short, if you look for it, you will see it. I feel better.

I must have got only one with even panels and no leaks.

Simple. They are going in-house for battery production and autonomous driving is nowhere near close, hence the $25K car.

Competitors to a company down play a companies announcements. Colour me shocked.

I think it was a really interesting event and was less hyperbolic and unrealistic than most things I hear about batteries. With some exceptions, they presented a solid path forward with a focus on the hard problems. I’ll take this sort of battery announcement all day long over a paper published on something they barely got to work in a lab and has no hope of working at scale.

As an investor, it was all positive news. They are at least 5 years ahead of the rest of the industry, and are setting themselves up to be able to continue mass production.

Depends what one’s expections of the presentation were.
It was an update of what they have planned and nothing more. The technology is moving too slow to expect any major leap. I mean.. giving a batery which would last much longer would hammer any short term sales as everyone would hold of their purchase. Those who bought a car recently (and that’s few hundred thousand of them) would be raging.

Several years ago I used the cost per kWh for Li batts rate of decline to average out when we’d see a 25k to 30k electric car (higher end Accord / Camry market) as these costs just keep decreasing year over year and the battery is the most expensive component of an electric car – it came out to around 2025 or so.

If Tesla can deliver it a few years early, as it appears Elon might be able to do, all the better. Terrible for the Tesla shorts…the worst short turnout I’ve seen in decades and it sucked so many people in. Regarding the battery day, I think everyone was hoping for some major jump in tech, but wasn’t to be…just more slow and steady progress which will get us there.

Renault already sells an EV with 245 mile (WLTP, so maybe ~200 mile EPA) for under $24K USD after incentives in France, and deducting VAT to make it apples to apples with Musk’s claim. It’s even cheaper in Germany, which has even higher incentives.

As a result, no surprises, the New ZOE is by far the best selling EV in Europe. Tesla is the one that needs to catch up here, which is clearly why Musk wanted to give people that $25K placeholder promise, to try and staunch the flow of sales in Europe for those who are willing to hold off on their purchases.

I think Musk/Tesla’s view is that buying a $25K EV today means too many compromises. They think the range isn’t good enough, and what you get for the money overall isn’t compelling enough compared to a $25K ICE.

There are some people who will accept the current compromises and go for a ZOE or a Bolt or whatever, and some of those are great cars. They’re just often not a good enough deal to win people over from gas or diesel powered cars.

The other major factor is that too often, these other manufacturers are building these EVs as "compliance cars", so they deeply discount them, take a loss, and don’t care about making them into a profitable business.

The Zoe is a great option, but the entry model is a cheap car. It is barely displacing any ICE cars because it isn’t desirable to most consumers.

Renault also has very thin margins on the Zoe and are using their own ICE sales to turn a profit.

ZOE is not in the same segment as Model 3 (smallest in Tesla’s lineup). Don’t get me wrong, it’s a nice car but size-wise it’s competing with the e-Corsa and the likes.
Talking of cheap then Skoda Citigo-E is almost half the price of ZOE (although the range is not on the same level)

For what it’s worth, Musk has explicitly said they have no plans to get the Model 3 down to $25K. He is talking about a new smaller model. Maybe in the Golf/ID3 segment, but maybe VW e-up or ZOE size. There are no details, because they may not have even started designing it yet.

There is a battery being made. The announcements were jaw dropping. If you need something shiny to look at then YOU are the problem. Not Tesla.

Correct the announcements were totally beyond my expectations, jaw dropping is an understatement.

I believe part if the not understanding the battery day are reflections from a non engineering background, that also include some analysts who were simply looking for some specific announcements.

For me it is less important that some of the battery day details were not understood, these leads will become very apparent soon enough.

If you have an engineering bent… you will have marvelled at Battery Day and been in awe.
…otherwise you’d be gazed-eyed, overwhelmed and sleepy.

The talk was squarely aimed at engineers and they really needed to prefix the tech-talk with a 10 minute dumbed down "overview" with simple graphics for the journalists to go away with. The technical journals would be happy with the main talk though.

I thought they did a great job of explaining complex things in simple terms. I think where they could have done better might be in how they summarized the status of the various investments they showed.

Some of the coverage is just unfair, too. Like this article. It claims that Musk said "I mean to be clear, I would not like to say that it’s totally working," about everything. But that statement was about one of the 10 or so things they talked about. Specifically, the electrode dry coating process. That statement does not apply to anything else. Some of the other things seem to be completely figured out and working great – e.g. the tabless design. Others are probably even farther off (lithium mining I would guess), and some are just unclear what state they’re in (the raw silicon anode stuff). I think it might have helped if they’d had a summary slide that showed the various items grouped by:
"Solved, ready to scale"
"Solved, figuring out how to scale"
"Clear path but some hurdles remain"
"Promising idea, but might not work out"

Of course I also see why they might not have wanted to get that specific. Same for timelines. They could have said, "The Plaid Model S will ship next year with our own batteries with these 3 of those 10 things. In 2022 we’ll have 5 of these things, and in more cars. By 2024 we hope to have all 10 at larger scale", or something. Even just talking about one specific set of things they’ll ship (presumably in the Plaid S) would’ve probably made it all more "real" for people. As it is, they didn’t even say in the presentation that the Plaid S would use any of this new stuff. But I think in the Q&A they said it would, just without any specifics.

Good news for the oil companies!

Yes, I am almost beginning to feel sorry for the fossil fuel companies.

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