Tesla's 4680 battery cells could reportedly be cheaper than suppliers' by the end of the year, as confirmed by the automaking giant's Vice President of Vehicle Engineering, Lars Moravy.
Powered on breakthrough technologies, such as tabless cells, Tesla produced the 4680 battery cell, the company's first significant wager. This battery cell is designed to compete with industry titans like Panasonic, LG, and CATL, which are also Tesla's existing suppliers.
Now, according to a reported update by Tesla's Lars Moravy coupled with the company's recent financial results for the first quarter of 2024, not only has production increased and will continue to increase, but Moravy says the company's goal with its 4680 battery cell program is to beat supplier cost of nickel-based cells by the end of the year.
Production of 4680 rose by almost 18%, or 20%, from Q4 to exceed the amount required for Cybertruck, or roughly 7 gigawatt hours annually. While Tesla ramps up the third and fourth lines in Phase 1, the firm also plans to retain multiple weeks of cell inventories to ensure it stays ahead of the Cybertruck ramp.
All of this is reportedly expected to happen during Q2. As a result of ramping, fueled by increased production volume and yield improvements across all lines, COGS steadily declines week over week.
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Tesla 4680 Production Complications
Issues surrounding Tesla's 4680 production surfaced late last year when the company's Cybertruck production was hindered due to complications with the 4680.
One of the primary constraints is the pace at which Tesla can produce the 4680 batteries needed for the Cybertruck using its new dry-coating technique. At the time, Tesla had not yet mastered the industrial dry-coating process necessary to produce 4680 batteries quickly enough to meet its production goals.
According to sources, dry-coating the anode in the 4680 cells was not an issue; however, Tesla was having trouble with the same process for the cathode, which is the most costly part of a battery at the time.
Tesla Profits Fall
While Tesla's pioneering battery proves to be heading in the right direction, Tesla recently followed its downward trend as its profits dropped by 55%.
Tesla sold $21.3 billion in the first quarter of 2023, 9% less than the year before. Analysts surveyed by Yahoo Finance projected $0.51 in profits per share on $22.15 billion in revenue. Tesla's operating earnings in the first quarter came to $1.2 billion, a 54% decrease from last year.
According to its Q1 financial report, the company experienced numerous difficulties in the first quarter, including the Red Sea situation, the arson attack at Gigafactory Berlin, and the gradual rollout of the updated Model 3 at its Fremont, California, factory. Additionally, Tesla said that the preference of many automakers for hybrids over electric vehicles is placing pressure on global sales of EVs.
On the plus side, the hybrid approach has enabled automakers to keep acquiring regulatory credits; Tesla was awarded $442 million in zero-emission tax credits during the first quarter.
