The Tesla founder said that the company could be selling up to 20 million cars annually by 2030.
Elon Musk has, for years, been making big promises about the future of electric vehicles and Tesla (TSLA) – Get Tesla Inc. Report in particular, saying last spring that the carmaker would sell as many as 20 million cars per year.
Musk is known for not always following through on big promises, especially when it comes to specific days and numbers. He previously said that full-driving capabilities for Teslas would come in “three months maybe, six months definitely” back in 2018 while it still hasn’t happened.
A Tesla semi truck was also promised by 2019, while the earliest deliveries are now not expected any earlier than 2023.
This Is What Needs To Happen Before Tesla Starts Selling 20 Million Cars Annually
According to a new report released by Reuters, one major thing is standing in between Musk’s promise to sell that many Teslas every year — the 4680 battery that the company announced back in 2020.
Similarly to how semiconductors are a largely unnoticed but crucial part of any smartphone, a powerful EV battery is indispensable to any electric car. Due to the use of dry-coating and more efficient cell-to-pack structure, the 4680 is reported to have five times more energy and six times more power of the 2170 battery.
Car companies like BMW (BMWYY) are also rushing to start using the 4680 battery in new models but, according to 12 experts close to Tesla that Reuters interviewed, production is nowhere near where it needs to be for them to become commonplace.
“I think [Musk] will solve it, but it won’t be as quick as he likes,” one expert with close ties to Tesla told Reuters. “It’s going to take some time to really test it.”
“They just aren’t ready for mass production,” said another.
All experts were kept anonymous to speculate and talk freely on the company information available to them.
The Future of Teslas and EVs
As it is one of the few carmakers to manufacture their own batteries, Tesla is in a better position to ramp up production than most competitors.
Acquiring energy company Maxwell Technologies for $200 million in 2019 also left Musk’s brainchild with the know-how and technology to start making 4680 batteries despite reselling it in 2021.
But at the same time, Tesla is dealing with many of the same problems as the rest of the EV industry — supply chain disruption means that many of the materials needed to make the battery are in short supply while the thicker coat means coating takes more time and cannot be done at the same mass-produced levels.
“They can produce in small volume, but when they started big volume production, Tesla ended up with many rejects, too many,” another anonymous source told Reuters.
But as some of Reuters’ sources predict that a 4680 battery can save as much as $5,500 on production of each Model Y battery, both Tesla and Musk certainly have incentive to ramp up production.
“Bulking up the battery cell helped a lot in boosting efficiency, but pushing for 50% cost savings for the cell as a whole is another matter,” one more source told Reuters. “That will depend on whether Tesla can deploy the dry-coating process successfully in a factory.”
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This story was originally published September 6, 2022 4:51 PM.
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