A recent post over at TMC kicked off a worthwhile discussion on the type of cells that will be used in the Model 3. Though it started with an incorrect assumption, it arrived at some fun conclusions. As the primer for the discussion, Elon had mentioned way back in 2012 on the Q2 earnings call that Tesla was working on a new cell that was designed to optimize the geometry of the cells vs the current 18650 cells.
One Cell to Rule Them All
This new cell would be approximately 10% longer and 10% larger in diameter (listen to Elon’s comments starting at 6:53 in this video) that yield 30% more energy per cell. There are also improvements in battery chemistry that means these cells are packing a much larger punch with fewer cells.
So what? This obviously isn’t news, as it’s almost 4 years old now, so why is it being brought up again? Well, we’re at the point where Tesla is actually doing a lot of the things that were just ideas way back in 2012 … or 2010. The new battery geometry and chemistry were being considered as means of optimizing the cells that Tesla had been using to date. For reference, 18650 cells are extremely common and are the industry standard for cheap lithium-ion cells that can be found in many laptops, high-end flashlights, and now, electric vehicles.
Being essentially a commodity keeps the price low, but means that they are not optimized for any single task, and Tesla is keen to take those cells to the next level with the optimization of the geometry noted above. Now is the right time to roll out the optimization because Tesla is getting ready to go big with battery production and vehicle production scale.
Need More Cells!
Pulling those two apart separately, ramping up battery production to volumes previously unheard of is an obvious function — if not the most important function — of Tesla bringing battery production as close to the vest as it is with the Gigafactory. Gigafactory 1, when complete, will produce more batteries than the rest of the world’s battery production combined (using 2015 numbers).
With battery producers like LG and BYD charging into battery production and ramping up their own battery production capacities as quickly as possible, as well as other auto manufacturers dumping cash into battery production, batteries and the lithium that goes into them are the hot new product in automotive.
Scale Like the World Has Never Seen Before
Paired up with the new batteries, the Model 3 unveiling at the end of March added fuel to the fire, and aside from just showing the world how gangsta Elon Musk really is, it confirmed that Tesla’s long road to a high–volume, low-cost production car is real. Possibly even a bit more important than that, it backed that assumption up with numbers … big numbers.
Model 3 has racked up around 400,000 reservations to date, which is finally a big enough number to shake even the sleepiest of automotive giants awake. 400,000 is a number that confirms what we’ve all been saying — the people of the world want to own a Tesla, they just haven’t been able to afford it until now. This is truly a testament to the bold vision put forth in the early days of the company and the hard work and dedication of Team Tesla that it took to get to this point.
Model 3 is only a reality today because of careful planning and many pieces of the puzzle being put into action in accordance with a very detailed plan. Do you remember how Ludicrous it sounded when Elon Musk said he was going to build a $5 billion dollar ‘Gigafactory’ to build batteries? It sounded crazy to those of us in the industry and must have sounded straight up bat guano looney tunes to people who didn’t know who Tesla was. Batteries? Uh … so what, bro?
Tesla Kicks it up a Notch
Beyond the excitement from the Model 3 unveiling, Tesla has had time to adjust to the masses of reservations that have been accumulated to date and has decided to kick its manufacturing plans into overdrive, announcing last week in the Q1 earnings call that it is accelerating the already ambitious production plan for Model 3.
Tesla had previously forecasted an annual production target of 500,000 vehicles per year in 2020, and on Wednesday, moved that target up to 2018. If the Model 3 reservation numbers proved that Tesla products have the potential to eat the lunches of lazy incumbent automakers, this announcement sends a loud and clear message that Tesla is HUNGRY and has just kicked down the doors to the cafeteria.
Put a Bow on it
Which brings us to today. Combining the increased battery sizes that bring more power to each cell with more efficient chemistries results in a higher energy density in each pack. This nets out to needing fewer cells for the same capacity in a pack. With Model 3 being a budget car, the range target is “only” 215 vs the 250–304 miles per charge of the larger packs found in Model S and X.
We know the Model 3 will have a battery pack that’s smaller than 60 kWh, so we can quickly take 33% of the cells out (vs a 90 kWh pack). The 60 kWh pack had 14 modules containing 384 cells each for a total of 5,376 cells, which is a healthy baseline for us to use. From there, we can take out another 30% on account of the increased capacity per cell. Yes, the newer cells are larger, so carry with them a larger footprint, but on a “total cells” basis, there’s a clear reduction.
Taking into account the 10–15% improvements in energy density from chemistry improvements, it’s not hard to see the Model 3 coming in with quite a bit fewer than 50% of the cells of a Model S or X. This doesn’t shed light on the implications the upgrade to the new cells will have on the size of the pack, the cost, or even the range, but it does bode well for a much more efficient battery system that will clearly come in at a lower cost for Model 3.
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