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In September 2020, Tesla held its first "Battery Day", which, as the name suggests, was about batteries.

On the stage, Musk said Tesla is confident that within the next three years, it will produce a Tesla car that will be priced at only $25,000, the cheapest car in history.

This is the first time that Tesla has held a press conference specifically for battery technology. Some people believe that for Tesla, this is even more important than launching any new car. In the words of foreign media Teslarati, "This may change the future of the entire electric vehicle industry."

At that time, Musk pinned his hopes on a battery cell that was 80mm high and 46mm in diameter. "The battery cell capacity can be increased fivefold, up to 200Wh/kg, which can increase the vehicle's range by 16%," Musk said.

Yes, you can tell from the size that Musk is talking about the 4680 battery. He emphasized that this is not a concept but a mass-produced product.

As the audience applauded loudly, no one could have imagined that this would be Tesla’s first and last Battery Day.

Take the steering wheel in your own hands

Musk has lost his patience with the 4680 battery.

According to The Information, in May this year, Musk asked the 4680 battery team to reduce the manufacturing cost of batteries by the end of the year, making their own batteries cheaper than those from suppliers. Not only that, the production capacity problem must also be solved simultaneously.

At the same time, Tesla appointed a new head for the 4680 battery team, Bonne Eggleston, who previously served as senior director of 4680 batteries and was responsible for battery manufacturing engineering. After taking office, he reported directly to Musk and supervised the battery materials department.

▲ Eggleston is the second from the right

According to a report by LatePost, before this appointment was announced, Tesla's battery materials department had already laid off half of its employees, and the 4680 battery team, which was highly valued by Musk, had laid off more than 80% of its employees, leaving only about 800 people.

Two 4680 battery team members told the media that they had not been told what the consequences would be if the team missed the end-of-year deadline. However, both believed that Musk might abandon his investment in the 4680 battery and rely on the technology of external suppliers.

This would be a 180-degree turn for Musk.

In his eyes, this was a technology so important to Tesla that Tesla had to develop and manufacture it independently. In Musk's view, the 4680 battery is to Tesla like the A series processor is to Apple, which can provide it with product performance that its competitors cannot match.

Musk recently made a similar decision, with his artificial intelligence startup xAI abandoning Oracle Cloud services to run its artificial intelligence models and instead preparing to build its own data company.

“Oracle is a great company,” Musk said, “but we have to be at the wheel and not just a passenger.”

Today, Musk's enthusiasm seems to be gradually shifting from battery technology to artificial intelligence. He also promised a few days ago that he would launch a steering wheel-free self-driving taxi on August 8 this year. But Bloomberg reported last week that the product has been postponed to October this year.

In addition, Musk also praised Tesla's robot product Optimus. He believes that this humanoid robot could one day bring Tesla a valuation of $25 trillion.

It can be said that Musk was as obsessed with 4680 batteries as he is with artificial intelligence now. Although these are two completely different directions, they have one thing in common - they are both difficult to achieve.

Tesla actually successfully manufactured a batch of 4680 batteries, which briefly appeared in the Model Y produced in the Berlin factory, but now the only model that uses this battery is the pure electric pickup Cybertruck.

The battery that was made with great effort is no longer used? Why?

While Tesla is delving into 4680 battery technology, battery prices from external suppliers have plummeted, with LG cells from South Korea and Panasonic cells from Japan becoming more attractive.

In terms of performance, Tesla analyst Jordan Giesige believes that unlike Musk's previous prediction of "significant improvements in energy density and range", the performance of the 4680 batteries previously produced by Tesla is only comparable to that of mid-level traditional batteries.

Musk doesn't want to do thankless tasks.

Today is different from the past

When Tesla held its Battery Day in 2020, it had just announced its first four consecutive quarters of profitability in history, leaving its competitors far behind, prompting other automakers to accelerate their electric vehicle plans.

Drew Baglino, then senior vice president of powertrain at Tesla, posted a roadmap - replacing 1 billion fuel vehicles, or every fuel vehicle on the planet, with electric vehicles.

For Tesla, this means they need to produce and sell 20 million electric vehicles per year, almost 40 times their annual sales. Musk believes that Tesla needs to make an electric car that almost everyone can afford to have a chance to achieve such a success. "This is the goal set at the beginning of the company," Musk said.

He also said the car had to be "very eye-catching" so that not only could almost anyone afford it, but they would also want to buy it.

In February 2008, Tesla delivered its first mass-produced electric car, the Roadster, which used 18650 lithium cobalt oxide batteries produced by Panasonic. The cost of the batteries was as high as $600-800 per kilowatt-hour, which is 3-4 times the price of gasoline. The whole car was sold for $109,000, destined to be a toy for the rich.

The U.S. Department of Energy has proposed setting the battery cost target at $100 per kilowatt-hour. Once this level is reached, the price of electric vehicles will be the same as that of fuel vehicles.

However, ten years ago, the cost of industry battery systems generally exceeded $1,000/kWh, and many battery experts believed that the $100/kWh target was unlikely to be achieved because the efficiency of batteries was improving at a rate far below Moore's Law, which states that chip efficiency increases by a factor of two every 18 months.

Musk and Baglino said Tesla needs to slash battery costs to make it possible to build a $25,000 electric car, as batteries are typically the most expensive part of an electric car, accounting for about 40% of the vehicle's cost.

Musk believes that Tesla needs to be involved in the entire battery manufacturing chain in order to reduce battery costs, "from mining ore to complete battery packs." Among them, the production of electrodes is the most polluting and costly part of the entire process. The traditional wet process even uses toxic solvents when preparing the negative electrode, and also has requirements for the size of the factory.

The dry process relies on smaller equipment, does not require toxic solvents, and requires only 1/10 of the factory area. Tesla can have such technology thanks to its acquisition of supercapacitor manufacturer Maxwell in 2019.

According to Tesla's calculations, if dry electrodes and the series of innovations announced by Musk on Battery Day can be implemented, the 4680 battery will reduce Tesla's battery costs by 56%, bringing it to less than $60 per kilowatt-hour - far below the $100 per kilowatt-hour threshold.

At the time, the news shocked the electric vehicle industry.

Soon after, Panasonic and LG announced that they would follow suit. Domestic companies such as BAK Battery and Eve Energy, as well as the more profitable CATL and BYD, also planned to develop 4680 battery production capacity.

However, Musk later issued a capacity warning about Tesla's battery plans.

When asked about Tesla's progress during the quarterly earnings call in July 2021, Musk said the company encountered problems in the production of dry electrodes and the production equipment was severely damaged in the process.

In traditional wet preparation, workers mix graphite, nickel, lithium and cobalt powders with solvents or water to make a slurry, which is then coated on huge foils and then pressed evenly flat using a calender.

The dry method, on the other hand, requires flattening the powder without any solvents—which is relatively easy on the positive side, since it involves only one soft, relatively ductile material, graphite. But on the negative side, their particles clump very easily, "like a very hard pizza dough," Musk said.

For this reason, the 4680 battery previously launched by Tesla only used dry-process positive electrodes, while its negative electrodes used the traditional wet process.

In July 2023, Japanese battery analyst Hideo Takeshita said that the energy density of such 4680 batteries is not higher than that of traditional batteries. "All the efforts made to make them have not brought any performance advantages." Takeshita said. Baglino later admitted this, saying that Tesla does not yet have the ability to prepare negative electrodes by dry method.

Now, Baglino has been replaced by Eggleston, and the process challenges of the 4680 battery have been left to the latter. According to people familiar with the matter, the 4680 team's goal is to verify the new method of mass production on the production line before September, and they don't have much time left.

In fact, some investors have long questioned Tesla's continued development of 4680 batteries.

At Tesla's annual shareholder meeting last month, an investor asked Musk if the 4680 battery could still make Tesla cheaper. Musk responded that battery prices have fallen so much in the past year that it is no longer the battery that determines the price of the car.

On the other hand, electric cars priced at US$25,000 (about RMB 181,600) have long been popular in the East.