Last month, Tesla held its Battery Day presentation, where they addressed the latest developments in their battery technology and the challenges they face in scaling their business. One of the main challenges Tesla is attempting to address is their supply chain logistics. In order to accelerate the world’s transition from fossil fuel power, Tesla needs to scale their business quickly.
Currently, Tesla sells about 365,000 vehicles a year, which is a significant number, but it is barely making a dent in the total vehicle market. To achieve their mission, Tesla estimates that they need 100 times growth in battery production and energy consumption. This means transitioning from the current production of 0.1 TWh to 10 TWh and increasing battery production by 1600 times for the sector.
The battery supply chain starts with mining. To build a battery, various raw materials are needed. One of the crucial materials is lithium. Lithium is the third lightest element and provides excellent energy-to-weight characteristics for batteries. Currently, the supply of lithium is not a major concern, as there are enough reserves to meet the demand for Tesla’s ambitious goals.
Another material used in batteries is cobalt. Cobalt, however, poses a significant supply chain bottleneck. The Democratic Republic of the Congo (DRC) provides a major portion of the world’s cobalt production, and the mining practices in the DRC have raised concerns regarding human rights and environmental issues. Tesla is working to reduce its dependence on cobalt by replacing it with nickel, which is more readily available.
Nickel, though more abundant than cobalt, may also become a bottleneck in the future. Scaling up battery production to meet Tesla’s goals would require a significant amount of nickel. Tesla is actively seeking partnerships with nickel producers to secure a stable supply.
Apart from addressing supply chain challenges, Tesla is also working on manufacturing innovations to increase their factories’ throughput. One notable innovation is the tabless battery design, which eliminates the need to stop the manufacturing process for welding tabs. This design significantly speeds up battery production and reduces manufacturing bottlenecks.
Although Tesla’s batteries are well-suited for the transportation sector, they may not be the best solution for grid-scale energy storage. Cheaper and more efficient grid storage technologies are needed to stabilize the grid and increase the use of renewable energy. Many promising alternatives to lithium-ion batteries are currently under development and may become commercially viable in the near future.
In conclusion, Tesla’s Battery Day presentation shed light on the challenges they face in scaling their battery production. While the supply of materials like lithium and cobalt poses some concerns, Tesla is actively working on reducing their dependence on these materials. Additionally, innovations in battery manufacturing are being pursued to increase production efficiency. As the demand for renewable energy and electric vehicles continues to grow, finding sustainable and efficient solutions for battery production and energy storage is crucial.
