Following significant job cuts at Tesla, which saw the company terminate more than 10,000 positions since April, and the appointment of a new head for its 4680 battery department, the electric vehicle (EV) giant is focusing on lowering costs for its Cybertruck and Model Y, Notebookcheck reports (via LatePost).
The move comes as Tesla seeks to address challenges in its production processes and maintain its competitive edge in the EV market.
Tesla's New 4680 Battery Chief Targets Lower Cybertruck, Model Y Prices Following Major Job Cuts
As first reported by LatePost, Bonne Eggleston has been appointed as the new head of Tesla's 4680 battery department, tasked with driving down costs for the company's key EV models. Eggleston seemingly confirmed this on X.
The recent layoffs notably affected various divisions, including 4680 battery facilities production, following former SVP Powertrain and Energy Engineering Drew Baglino's resignation.
The Chinese report tells us that Eggleston's initial mandate includes suspending layoffs in the 4680 battery department and setting a cost reduction target for completion by the end of the year.
Tesla aims to produce 4680 batteries cheaper than those from suppliers like Panasonic and LG New Energy, with the potential abandonment of the 4680 project if this goal is not achieved.
SAN FRANCISCO, CALIFORNIA - MARCH 09: Tesla cars recharge their batteries at the Geary Boulevard Supercharger on March 09, 2022 in San Francisco, California. With oil prices continuing to soar, shares for companies in the electric vehicle sector are rising as consumers look to trade their gas powered cars in for electric vehicles. Photo by Justin Sullivan/Getty Images
Challenges in Tesla's Pursuit of Cost Reduction
According to recent reports, Tesla's revenue and gross profit margin on car sales have declined, marking the first decline in sales in 15 quarters. To counteract this trend, the company focuses on reducing battery costs by 50%, with an annual production capacity as of March sufficient for 60,000 Cybertrucks.
However, achieving this ambitious cost reduction target poses significant challenges. Tesla's initial efforts with the 4680 batteries have only yielded a 20% reduction in production costs, primarily leveraging the cell's larger design and structural usage in the chassis. The more challenging part, mastering the dry-coated electrode production method, remains a hurdle.
Former head of Tesla's three electric power plants and 4680 battery project, Drew Baglino, reportedly favored a more revolutionary approach to battery production. However, Eggleston's strategy focuses on simpler goals for 4680 battery production and potentially sourcing cathodes from external suppliers.
Despite these adjustments, concerns persist among engineers that achieving only a "simple version of the goal" may diminish the importance of the 4680 battery. Additionally, Tesla faces competition from other battery manufacturers, such as CATL and BYD, who can produce batteries at lower costs.
The recent management changes at Tesla, including the departure of several senior executives, stress the company's evolving priorities. While Elon Musk remains at the helm, the pressure is mounting amid manufacturing challenges and product launch delays
