Tesla is poised to make significant strides in its battery production capabilities, as the company anticipates surpassing suppliers in the cost-effectiveness of its 4680 battery cells by the end of the year. This development marks a pivotal moment for Tesla’s transition from a cell user to a high-volume manufacturer, demonstrating its commitment to innovation and self-reliance.
The 4680 cell format, enabled by Tesla’s pioneering tabless cell technology, holds the promise of significantly lower costs, increased driving range, and faster charging capabilities. Tesla’s ambitious venture into cell manufacturing initially faced challenges, but the company has made substantial progress in ramping up production and improving cell performance.
Tesla’s Vice President of Vehicle Engineering, Lars Moravy, provided an optimistic update on the 4680 program, highlighting an impressive 18-20% increase in production compared to the fourth quarter. This surge in output exceeds the requirements for the Cybertruck, which stands at approximately 7 gigawatt hours per year. Tesla’s production capacity is expected to remain ahead of the Cybertruck ramp throughout the second quarter, with the company actively scaling up its production lines.
Moravy also shared Tesla’s ambitious target of surpassing the cost of nickel-based cells from suppliers by the end of the year. This goal excludes lithium-phosphate (LFP) cells, which Tesla does not currently produce but utilizes in a significant number of its vehicles. Nickel-based cells boast higher energy density, making them suitable for electric vehicles with extended driving ranges. Tesla’s exclusive use of 4680 cells in the Cybertruck underscores the company’s confidence in the technology’s potential.
The success of Tesla’s 4680 program has defied expectations, considering the general consensus among analysts that the project has encountered difficulties. However, if Tesla can transition from being a non-manufacturer to a high-volume cell producer with lower costs than established competitors within a span of five years, it would be a remarkable achievement.
Tesla CEO Elon Musk has acknowledged that the 4680 program was initiated out of concern that increased battery cell orders from other automakers would strain pricing at suppliers. However, the recent slowdown in EV adoption has eased some of that pressure, diminishing the urgency of the 4680 program. Despite this shift, Tesla remains committed to its ambitious goals and continues to invest heavily in its battery manufacturing capabilities.
