Tesla China Denies 54% Drop in Production Costs for 4680 Batteries

Tesla China Denies 54% Drop in Production Costs for 4680 Batteries
Written by Techbot

News emerged recently that Tesla’s production of 4680 large cylindrical batteries has achieved a major breakthrough, and that costs have dropped by 54%. However, many staff members of Tesla’s China division stated, “At present, there is no related news.”

Tesla released its 4680 battery with a diameter of 46mm and a height of 80mm in September 2020, aiming to significantly increase vehicle cruising range and reduce production costs. Compared with the 2170 battery, the energy of the 4680 battery is increased by five times, which can increase the mileage of the vehicle by 16%. At that time, Tesla said, “In the future, with the improvement of battery materials and automobile design, the cruising range will increase by 56% and the production cost will decrease by 54%.”

At Tesla’s conference call for the third quarter of 2022, Tesla CEO Elon Musk released a signal of expanding the capacity of 4680 batteries. He said, “The future goal is to expand the capacity of 4680 batteries to 1000GWh per year, and the cost can be reduced to $70/kWh.” Tesla announced last month that its 4680 battery team in Fremont factory in California has produced 868,000 units of lithium-ion battery cells in the past week, which can be used on more than 1,000 electric vehicles.

There are also many battery companies producing cylindrical batteries in the Chinese market, such as CATL, EVE Energy, Gotion Hi-Tech, SVOLT and so on.

The energy density of the new generation 4695 large cylindrical battery of EVE Energy reaches 350Wh/kg, which can realize ultra-fast charging for nine minutes and endurance from 500 km to 1000 km. Manufacturing efficiency can be improved by 30% and the manufacturing cost can be reduced by 50%. Gotion Hi-Tech also exhibited two large cylindrical batteries, with an energy density of 310Wh/Kg.

With the rising price of raw materials for batteries, car companies will give priority to higher cost performance. Besides Tesla, BMW Group also favors large cylindrical batteries. In September 2022, BMW announced that it would use brand-new large cylindrical batteries in the Neue Klasse models from 2025. NIO, JAC Motor and other car companies have also indicated that they will launch models equipped with 4680 cylindrical batteries.

SEE ALSO: Tesla Global VP Grace Tao Explains China Price Adjustment Strategy

Galaxy Securities has predicted that in the future, cylindrical batteries will replace some market share of soft and square batteries. Except for Model 3, all Tesla models plan to adopt or partially adopt 4680 batteries. It is estimated that in 2025, the sales volume of Tesla models equipped with this kind of battery will reach 1.21 million units, corresponding to an installed battery capacity of about 178GWh. It is conservatively predicted that the installed capacity of 4680 batteries globally will exceed 200GWh in 2025.

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