Tesla's battery strategy, implications for LG and Samsung
In this picture, taken with a drone, the construction site of the Tesla Gigafactory is pictured in Gruenheide near Berlin, Germany, August. AP-Yonhap
By Kim Yoo-chul
Tesla could unveil a “million-mile” battery based on single crystal technology and progress in dry electrode coating, which could lower costs, at its “Battery Day” scheduled for next month.
Tesla still maintains a real-world battery range advantage. But this appears to be due to non-battery optimizations in the powertrain and vehicle design, which feel more replicable.
One feasible signal is that the upcoming Battery Day will arguably be Tesla's attempt to regain its battery advantage with the two following initiatives ― its development and manufacturing of in-house proprietary battery cells that would have a longer range, and a shift toward cheaper CATL LFP battery cells for Chinese-made Model 3s, according to offline seminar recently organized by Bernstein Research, a global research investment firm.
Battery Day is also expected to highlight types of technologies that Tesla would pursue in the future. One is single crystal chemistry as Tesla has recently bought a company called Maxwell that has some promising dry electrode technologies which may be combined with single crystals to cut costs by up to 20 percent and also facilitate manufacturing.
It's likely that Tesla will talk more about its cobalt-free chemistries. Cobalt is mostly sourced in Congo, and lessening dependence on cobalt would ultimately be a good thing, investors said. Similarly, eyes are on whether Tesla CEO Elon Musk will talk more about his idea of building a Terafactory given investors betting on Tesla's growth.
As Tesla is set to become the largest and most profitable carmaker in history, thoughts are that it would be tough to talk about battery technology without addressing the massive run-up in the company's stock.
Besides the LFP battery, the industry's cheapest alternative comes with some energy density disadvantages. If the Battery Day highlights “energy density,” another area where Tesla has been very strong, then that would be a plus for LG Chem as LG is selling its NMC 811 cell to Tesla at its Chinese plants.
As Tesla's GWh capacity will grow further, which means Tesla could face battery shortages in the next few years if suppliers are limited to LG Chem, Panasonic and CATL, any production ramp up by LG and possibly Samsung SDI for NMC 811 cells would benefit the Korean battery duo.
Given the possible scenario that battery makers will probably look like memory makers in the long term ― due to higher capital intensity, few players and consolidation ― attention is how LG Chem and Samsung SDI see continuous progress in new battery technology innovations.
For example, while China's CATL has done some work on the single crystal cathode, LG Chem and Samsung SDI are still working on it with no timeline set. Expansion in energy storage systems (ESS) is cited as an area LG and Samsung should focus on as batteries for ESSs seem to be growing in demand much faster than electric vehicle (EV) batteries.