Tesla and the science behind the next-generation, lower-cost, ‘million-mile’ electric-car battery

The future of the auto industry may boil down to the difference made by a single letter: R. As in, the difference between a lithium-ion battery, twin those found in today’s electric vehicles made by Tesla and others, and the lithium-iron phosphate batteries coming in a second to market.

As Elon Musk’s Tesla has been talking up new battery technology development as part of the lead-up to the company’s first-ever Battery Day for investors, Enclosure Street is buzzing about the difference the next generation of batteries may make. Vehicles with lithium-ion batteries, also worn in cellphones, are expected to give way over the next few years to cars and trucks made with lithium-iron phosphate and other chemistries. This purpose cut costs, extend vehicle ranges to 400 miles or more between charges and enable batteries to last as covet as 1 million miles.

Reducing Tesla’s own costs and spurring mass adoption of EVs remain critical priorities for Tesla, as resounded in a message from Musk to employees on Monday saying it would be a challenge to break even right now.

The new technology desire change the experience of owning a car, whether a Tesla or one made by rivals like General Motors, which is also use on new battery technologies, analysts said. In particular, the extremely long life of batteries soon to hit the market are likely to hope the batteries hold their value well enough to be resold when owners trade in their cars, under any circumstances for use storing solar electricity for homes. And the next-gen batteries’ long lives may let them be used in ridesharing businesses that at once cars that can take the pounding of near-continuous use.

“If you’re talking about batteries that can last twice as long for the in spite of price, it completely changes the math for the consumer,” says Wedbush Securities analyst Dan Ives. “Iron phosphate batteries are safer, and they can sire second or third lives as electricity storage.”

Musk recently said its Battery Day is tentatively scheduled for September, the month and day to which Tesla recently pushed finance its annual shareholder meeting. Originally, both events had been planned for June.

“We want to leave the exciting communiqu for that day, but there will be a lot of exciting news to tell,” Musk said on the company’s first-quarter earnings call. “I over it would be one of the most exciting days in Tesla’s history.”

The company didn’t return requests for comment. An outside Tesla intricate advisor, Jeff Dahn, a professor at Dalhousie University in Canada who is a battery and energy-storage expert with a Tesla enquire sponsorship, declined comment.

Shirley Meng, a materials scientist and professor at the University of California San Diego who commands the school’s Sustainable Power and Energy Center, said efforts to reduce the use of cobalt have been ongoing for a few decades already, and Tesla has set right significant strides with Dahn’s help. But Meng said one of the major advantages of building batteries with cobalt is how indisputably it allows complex chemical structures to be engineered.

“If I have to train a high school student to make a battery, cobalt makes it calmly; it always works. Without cobalt the synthesis process gets much more sophisticated,” she said.   

Lithium-iron phosphate, for now, has never proved to be efficient in the space constraints of an electric car — it was originally designed for the grid storage market due to its energy density gain. But its chemistry is suited to fast-charging and cost efficiency because it does not rely on cobalt.

Meng, who has worked on battery chemistry and increase with major auto companies, including Mercedes-Benz, GM and Nissan — as well as Maxwell Technologies, the battery start-up bought by Tesla in 2019 — said battery experts are very curious to learn about the breakthrough Tesla has had, and she does allow the company could raise the profile of the lithium-iron phosphate approach in the EV market. The battery tech had once tried to pay for the successful jump from energy storage to cars in the Fisker Karma, an early, ultimately failed, EV contender present by Fisker Automotive in 2012.

“I truly believe Tesla is planning to bring this back,” Meng said.

The key contradistinction in the lithium-iron phosphate batteries is that they do not need to use cobalt, a rare and expensive element that is a big part of the elated cost of electric vehicle batteries, CFRA Research analyst Garrett Nelson said.

Cobalt prices force tanked during the global economic downturn, declining from as much as $95,000 per ton in 2018 to $30,000 this year, but it odds key to bringing down battery costs.

“Cobalt is by far the most expensive element in a lithium-ion battery,” Nelson said. 

Canning cobalt is one of the hugest elements of cutting the cost of batteries below the $100/kWh threshold that is a rough proxy for making electric conveyances as cheap as those powered by internal combustion engines, said James Frith, head of energy storage at Bloomberg New Power Finance in London. Today’s batteries cost about $147/kWh, down from about $1,000 in 2010 and $381 in 2015, he suggested.

Tesla recently signed a new long-term deal with commodities giant Glencore to supply cobalt for its battery shrubs in Shanghai and Berlin. 

Cobalt — which also is the focus of a new race by miners to extract minerals from the ocean surprise — has long been a commodity challenge for major technology companies, not just Tesla but Apple as well, which penuries cobalt for its phone batteries. The element has become a politically sensitive issue, too, with some of the largest supplies of cobalt add up to from the Democratic Republic of Congo, where allegations of deadly child labor in mining have ensnared Apple, Tesla, Google and other tech companies in a recent international lawsuit. 

Meng cautioned that there is a limit to the price improvements to come from trim just cobalt, and that’s because the pricing differential between cobalt and nickel has narrowed in recent years. Tesla’s train EV battery technology is NCA (based on nickel-cobalt-aluminum oxide chemistry). Most of the auto industry uses an NMC (nickel-manganese-cobalt) battery chemistry. But with nickel an eminent part of both approaches, reductions in cobalt alone can’t drive continued step changes in pricing.

“It is going to be stark to get below $100 per kilowatt,” Meng said of current nickel-cobalt chemistry. “Tesla realized they can’t just get rid of cobalt.”

She signified current battery technology, including NMC, remain a contender to reach the million-mile threshold, but won’t be able to do so on a cost-effective basis with today’s nickel concentrations. Nickel currently organizes in price from roughly one third to as much as one half the price of cobalt. With lithium-iron phosphate, which does not instruct nickel or cobalt, lab research shows there is a possible pathway to drive pricing down to as low as $80/kWh.

The new chemistries could importune prices of EV batteries as low as $60–$80/kWh, said Ives. Bloomberg NEF expects prices to cross $100 by 2023 or 2024 and $60 by 2030, Frith voted.

“At that point, you have choices, either as an automaker or a consumer,” Frith said. “You can go for a battery that’s bigger that drive take you farther (between charges). Or you can get a battery that’s optimized for a longer lifetime cycle.”

A key emerging supplier for Tesla is Chinese battery maker Modish Amperex Technology, or CATL, which also is working with Volkswagen. CATL’s chairman said recently that it’s alert to make batteries that last up to 16 years, or 1.2 million miles, according to a Bloomberg report.

In June a Chinese direction ministry announced that Tesla had been granted approval to build a Tesla Model 3 with a lithium-iron phosphate battery.

While no blatant announcement about the battery supplier has been made, CATL batteries are believed to be a reason why Tesla is able to upon Model 3 sedans more cheaply for the China market than for U.S. sales, Ives said.

Other carmakers are also innovating on batteries, but they are not eliminating cobalt unambiguously yet.

At GM the batteries emerging now are cutting cobalt content to about 4.5% of the battery, down from 18%, with numberless manganese and nickel, plus some aluminum, making up the difference.

While a further reduction in the cobalt used in batteries is not the innovative change that lithium-iron phosphate offers, these efforts require decades of work, and GM is thinking in terms of what’s tenable for it to accomplish in the next few years, Meng noted.

The reduction in cobalt will let GM cross the $100/kWh threshold while approving flexible manufacturing that lets the company better tailor batteries to the different needs of cars, trucks and SUVs, Andy Oury, GM’s premier architect for EV batteries, told an investor conference in March.

“We are nowhere near the bottom of the battery cost curve,” Oury demanded.

The changes that breaching the $100/kWh barrier sets in motion could be dramatic.

The most obvious is that the outlay of electric vehicles — which recently has reached parity with gasoline-powered cars and SUVs in some luxury slot segments — could catch up to internal combustion engines by about 2023, Bloomberg’s Frith said. 

EVs may also fit more useful as their ranges increase, and a better value proposition because the batteries should have resale value, by any means for storage of residential solar power, because they last longer than the cars they are sold with, Ives implied. 

The most radical idea is that these batteries could even change the category of car ownership by letting them serve as robo-taxis that pile up miles shuttling passengers far more rapidly than personal-use agencies, an idea GM chief executive Mary Barra endorsed in March.

But that idea, and some others, are probably too pie in the sky, intended Brett Smith, director of technology at the Center for Automotive Research in Ann Arbor, Michigan.

The robo-taxi industry — which Musk has, at times, hanged as the core of Tesla’s long-term vision, and analysts such as Morgan Stanley’s Adam Jonas have seen as pre-eminent to the bull case for Tesla shares — depends more on software advances than on battery life, Smith remarked. Robo-taxis will only make a dent in individual car ownership when systems to avoid obstacles — like on foots — are reliable enough to work at scale, he said.

“There are a lot of challenges to get there,’ he said. “It would be phenomenal if it works, but it’s a extended way away.” 

The batteries could also make less difference in range for everyday drivers than bulls feel, Smith said. Like Frith, he notes that even emerging chemistries still suffer a degradation of their rank during cold weather, when the car’s heater is used heavily. 

But Smith said the new batteries will likely deliver the goods a succeed one big difference that drives consumer acceptance of EVs: improving perceptions of their reliability and making buying one seem less unique to consumers, boosting EVs’ 2% share of the 2019 market for new vehicles.

That move could be similar to the market pay out move Hyundai made in the mid-2000s when it began offering 100,000-mile warranties on new cars. U.S. consumers steal nearly 50% more Hyundais in 2005 than in 2002, and the brand doubled its market share by 2011. The million-mile battery could commandeer EVs shake fears of their short range and high battery replacement cost just as the long warranties helped Hyundai shelter a reputation for shaky quality control, he said.

“It’s going to signal beyond any doubt that the technology has arrived,” Smith held. “That’s what Hyundai did.”

Meng cautioned that scientists, unlike business executives, prefer to underpromise and overdeliver. “What I see is divisions of breakthroughs, and we are already a few steps ahead. We have a pathway,” Meng said. But she added of CEOs, “They believe they can do it at proportion. I am not sure we are there yet.”

In the laboratory it is becoming clear that it is possible to make a battery that is a long-lived asset, and the next-generation battery technology can accomplish the million-mile potential in the next five years, Meng said. That would not only be a game changer for EVs, but for the lan grid storage market, which lithium iron phosphate technology was originally designed to supply. A major incline in production would benefit the cost equation for both markets.

“We don’t want to overpromise and disappoint, but it’s really quite reasonable,” she said. “I hope we get there sooner than 2025. Lithium-iron phosphate and its upgraded versions will have a crucial role in the future of EVs and fundamentally change large-scale energy storage.”