Gustavo Henrique Ruffo
Probably not, in response to a number of specialists impressed with the 4680 cells.
Reuters analyzed post-market numbers earlier than Tesla Battery Day and pre-market numbers proper after it and claimed the corporate misplaced $50 billion in market cap. When the stock market opened on September 23, it greater than confirmed that preliminary quantity: Tesla went from round $419.52 billion on September 21 to $355.08 billion on September 23, in response to YCharts. Was it a good response contemplating what Tesla offered? Specialists mentioned it wasn’t.
The extra vocal was Sandy Munro. He was a part of the Tesla Battery Day Postmortem Autoline evaluation and mentioned he couldn’t perceive the dive in any case Tesla offered.
“Maybe Wall Street did not like it, but they look at stuff in an entirely different way. For the people that understand the engineering behind this, this is a big deal. I couldn’t believe it when I saw the stock was going down. That thing should be skyrocketing.”
That’s the impression even for those that weren’t so enthusiastic concerning the occasion, corresponding to Simon Moores, from Benchmark Mineral Intelligence. A little bit after Tesla Battery Day ended, he mentioned Elon Musk had offered “more fantasy and incorrect statements than reality.” Moores informed InsideEVs exactly what he meant with that.
“Elon mixed true innovations like the 4680 and tabless battery cell with maybes like Maxwell process and silicon anodes and red flags like its lithium and nickel extraction plans. There was no one clear message and more questions were raised than answered. But that’s unsurprising when Tesla mentioned nine major innovations all at once at the same time as introducing the lithium-ion battery and its supply chain to the mainstream.”
All issues thought of, Moores didn’t tackle the explanations for the market cap loss however made clear that the 4680 cells deserve a number of consideration.
“What investors should take note of is the new 4680 cell and manufacturing process. Before Battery Day, the team at Benchmark predicted that this switch alone could push cell level cost from $97/kWh to between $85-90/kWh. This is a significant leap forward and near term – less than two years.”
Munro appeared actually excited concerning the 4680 cells. Being cylindrical, they are often produced on a big scale, which can convey their costs down. That is what makes them significantly better than prismatic batteries: their decrease manufacturing prices.
“This is a turning point: 50 percent less cost, 59 percent more energy… This is ridiculous! Not only that: it weighs less. All of a sudden, now I can see a $25,000 car that is worth basically driving with this thing. With this (the current 2170 battery), it is too heavy. This is perfect. This is the end of the ice age. I don’t need to have a solid-state battery anymore. I got this thing. With 50 percent weight loss, I’ll take that all day long.”
In our article concerning the market cap loss, we talked about Cairn Vitality Analysis Advisors estimated Tesla paid $156/kWh in 2019, however Moores’ numbers are completely different.
“There are many ways to look at battery cell prices, but our data collected monthly looks at both cost of production and selling price. The average selling price in 2019 was $125/kWh for auto large contact. Tesla’s production cost at Giga 1 was $97/kWh.”
Munro offered a really comparable determine at Autoline.
“When we did the analysis of the Model 3 (back in 2018), the price was $156/kWh. Now, it is $108/kWh. When Elon said that he already mashed it, I can tell you for sure that that’s the truth because we did the costing on it and we do very accurate costing. So they were at $108 when we did the Model Y. If we go to this thing – the 4680 cell – I think we are going to see even a lower price.”
Apply the 14 % cost-cutting the 4680 cells provide, and we might get to round $93/kWH when you think about Munro’s quantity. Should you want that of Benchmark Mineral Intelligence, the price drops from $97/kWh to $83/kWh. The case is the occasion didn’t current solely a battery innovation, however a bunch of enhancements that may make the price per kWh fall 56 %.
When Autoline positioned the screenshot above of their evaluation, Munro didn’t miss the chance to indicate how impressed he was with Tesla Battery Day.
“If I was the CEO of a big OEM, I’d be wetting my shorts right now. (…) That’s the slide that says that, if you are investing in ICE vehicles, you’re screwed. My prediction: 2030. That’s the end. That’s when it is going to flip.”
Bob Galyen, from Galyen Vitality LLC, can be the previous CTO of CATL. He didn’t share the identical enthusiasm Munro has however nonetheless gave the 4680 cells due credit score.
“These cells are not new but are used in a new way. They exist since the 1920s, 1930s. What Elon and his team did not mention was that this tabless configuration also helps with the heat transfer characteristics of the cell. If you look at the aluminum and the copper and the way they can put the can together, it is very good design, just applied in a different way, in a different electric chemistry.”
No matter that, Galyen may assist us perceive what most likely occurred with Tesla Battery Day: an excessive amount of hype, as Vivas Kumar mentioned in a latest Benchmark Mineral Intelligence webinar. Examine what Galyen says within the video above.
“Technology into cash is the key and this is what Elon and his team are trying to do. They are just more vocal than other companies. But is there a differentiator between the technology that other companies are working on and Tesla? No. Those guys are working on similar types of technology. In fact, since I semi-retired from CATL, I have contracts with other technology companies that are working on things that are beyond what Elon and his team are talking about.”
Other than the errors that may have occurred at Tesla Battery Day, the end result ought to have been higher. Simon Moores places extra perspective into what was revealed there.
“Various the upstream claims have been borderline fantasy: lithium is simply salt, you’ll be able to wash lithium out of clay with water and salt and use it in a battery, lithium is in all places, nobody has regarded for lithium, making silicon for one-tenth of the prices, and silicon is ‘just sand.’
Lithium from clay isn’t a business course of but. There are a lot of pioneers who’re engaged on this course of so it’s not unimaginable. However it’s additionally not as easy to only dig it out of the bottom, wash the lithium out, and use it in a battery. There are a lot of extraction, purification, processing methods, and qualification hurdles to get to that time. The problem right here is oversimplificating. It’s an order of magnitude simpler to construct a battery plant than it’s to scale battery-ready lithium.
The upside: even when solely a fraction of those improvements occur, the price of the lithium-ion battery will nonetheless be coming down. Simply not as aggressively as Elon was outlining. However, once more, traders must separate desires from actuality and Tesla Battery Day didn’t do an excellent job of that. One factor is for positive, although: the lithium-ion battery is now mainstream.”
Galyen additionally appeared politely skeptical of those Musk claims.
“They’re speaking about having the ability to combine these uncooked supplies instantly into the battery with little or no processing. That’s going to be an enormous problem for him and I hope he´s profitable. If he figures out find out how to crack that nut, he’s going to be extra rich than he’s at this time. (…)
Taking lithium out of clay? It is a new one on me. I’d be very to listen to how they’ll extricate that lithium conveniently out of the clay and return it again to its unique soil.”
The battery veteran additionally revealed issues about new mines and
“How lengthy does it take to open a model new mine? Simply going by means of the federal governments of most international locations, It takes an act of God to get a brand new mine opened up. It’s an actual ache to get new mines open. (…)
You’re speaking about rising the enterprise to about three TWh by the yr 2030. Take into consideration the provision base that’s presently supplying 100 GWh, 200 GWh, 300 GWh at this time. You’re going to need to have a multiplier past perception for all this provide base to develop the know-how to make the merchandise in that form of quantity. It’s large.”
As we talked about in earlier articles, those who imagine Tesla can ship no less than a part of what it promised at Tesla Battery Day should be proud of the present stock price. Being decrease, it’ll permit them to purchase extra shares. For all of them, the secret will not be a reputation. It’s a quantity: 4680.
Supply: Autoline Community and Benchmark Mineral Intelligence
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