Tesla’s battery day has come and gone, leaving many experts scratching their heads over what they saw. Instead of the anticipated “million mile” battery we got a series of plans: a plan to manufacture Tesla’s own battery; a plan to process the raw materials; even a plan to mine its own lithium.
And while some of those plans sounded genuinely impressive, some experts were left with the impression that Tesla was headed into uncharted waters without a clear sense of direction.
“I came out of it with a confused message about what they’re doing with the [battery] supply chain,” said Vivas Kumar, Tesla’s former battery supply chain manager and currently a principal at Benchmark Mineral Intelligence, during a post-battery day webinar.
The Verge reached out to a battery researcher, an automotive expert, and a rare earth mineral supply chain analyst to get a clearer picture of what Tesla’s battery announcements actually mean. After watching the event, we were left with a question: How real is any of this?
Musk’s announcement that Tesla was going to start mining its own lithium, in particular, struck Chris Berry, president of House Mountain Partners and an analyst who focuses on energy metals supply chains, as especially ill-advised. Not because it would be impossible, but because it would be extremely difficult — not unlike landing a rocket on an autonomous barge in the ocean.
“I personally think that it’s a terrible idea,” Berry said. “I don’t care what Tesla is, a car company or a technology company. I know that’s a big debate. It’s a terrible idea for a company like Tesla, or VW or BMW or whoever, to get into mining because it’s a radically different business.”
Musk announced that the company had taken the first step of expanding into mining by securing the rights to a 10,000-acre lithium clay deposit in Nevada. The mine, along with a new North American-based cathode manufacturing facility, would be two new additions to Tesla’s growing lineup of factories and operations.
But there’s one problem with that, Berry said. “There has never been any commercial production of lithium from clay sources,” Berry said.
Most of the world’s lithium comes from two places: lithium brine deposits in South America’s “lithium triangle” of Argentina, Chile, and Bolivia; and hard-rock deposits in Australia. Those processes are well understood, Berry said. The same can’t be said for Musk’s position that lithium can be extracted from clay deposits in Nevada using only water and salt.
“I turn that question around and I say, ‘Well geez, if it was this easy to find a domestic source of clay-based lithium, and just used everyday materials like water and like salt to produce commercial battery-grade quantities at scale, why haven’t we been doing this all along?’” Berry asked.
Musk acknowledged Tesla was in uncharted territory. “Nobody has done this before to the best of my knowledge,” he said during battery day. But his explanation of the process left a lot unexplained. “We take a chunk of dirt in the ground, extract the lithium, and put the chunk of dirt back where it was,” he said. “It will look pretty much the same as before.”
There are several companies in Nevada that are attempting to mine lithium from clay, for example Lithium Americas. But they haven’t seen much success yet because they haven’t raised the funds, nor secured the permits, to begin the actual mining process. The typical lithium mine, from discovery to production, can take seven to 10 years to become fully permitted, Berry said. Musk didn’t offer a clear timeline on getting this mining operation up and running.
“This isn’t some weird kind of black box secret thing: ‘God, we don’t know how to produce lithium from clay,’” Berry added. “It’s just a question of economics and permitting.”
Investors were underwhelmed with battery day as well. Tesla’s stock price began to dip as soon as Musk said that some of the innovations showcased at the event were “close to working” and some were three years away from fruition.
The vision Musk outlined on battery day was less about reimagining batteries, and more about reimagining manufacturing, according to Shashank Sripad, a battery researcher at Carnegie Mellon University.
“There were no big surprises in battery materials or design, but quite a few interesting things in manufacturing and engineering,” Sripad said. “It was as much a manufacturing day as it was a battery day.”
Musk announced that by cutting the cost of batteries by more than half, Tesla would be able to make an electric car that costs the same as or less than a combustion engine vehicle. He promised a “$25,000 electric car” in three years — though this is not the first time he has made this exact promise. In a 2018 interview with YouTuber Marques Brownlee, Musk said, “I think in order for us to get up to … a $25,000 car, that’s something we can do. But if we work really hard I think maybe we can do that in about three years.”
Some of the things Musk announced, like the new “tabless” battery cell, larger cells for more energy capacity, and a new, module-less battery pack design integrated into the body of the vehicle, are “simply engineering challenges” that Tesla is equipped to solve, Sripad said. There is an established body of research confirming Tesla’s approach to manufacturing cheaper, more efficient battery cells. All the company needs to do is scale up the process to make it happen.
Maybe that’s why Musk also said Tesla would “not reach serious high-volume production” on its new battery-making process until 2022.
Musk also announced a future battery design that would be structurally integrated with the car. This could make for a stronger, longer-lasting, and more cost-efficient battery. He compared it to design changes in airplanes, in which the wings of a plane have evolved to become essentially a repository for fuel — though, like other portions of the presentation, Musk was short on details on the new structural design.
Sam Abuelsamid, an automotive expert at Guidehouse Insights, said a better analogy would be consumer electronics, like phones and laptops. By eliminating the packaging required for a removable battery, electronics makers could stuff more battery cells in the same volume. But that can come at the expense of making future repairs.
Abuelsamid speculated that this could result in a “stronger” battery, but also one that is “completely non-serviceable.” He noted it’s more difficult to repair a bad cell or faulty connection when everything is bonded and sealed in the battery pack. “You basically have to scrap the whole thing,” he said, “which is not desirable. I don’t think we are yet at the stage of battery evolution where this would be a good idea.”
This isn’t the first time Musk laid out a bold vision without a clear path to realization. During Tesla’s autonomy day event in 2019, Musk said that by the middle of 2020, Tesla’s AI technology will have progressed to the point where drivers won’t have to pay attention to the road anymore. He also predicted there would be a million self-driving Tesla cars on the road by this year as part of a massive ride-sharing experiment. Neither of those things came to pass.
Battery day was more muted, and that’s probably why investors came away disappointed and Musk stans found themselves struggling to find the excitement. In addition to tamping down expectations before the event, Musk was uncharacteristically realistic about the challenges Tesla will face as it attempts to vertically integrate mining and battery production into its manufacturing process.
“I mean to be clear, I would not like to say that it’s totally working,” Musk said during the event. “It’s close to working, but it’s not even now at the pilot plant level. It is close to working well, I could say. It’s fair to say probably it does work but with not a good, not a high yield.”
Tesla’s battery plans may not be operational yet, but the intention of those plans is just as important as the execution, said Kumar, the former Tesla battery manager who now works at Benchmark. Maybe even more so.
“Don’t underestimate this company,” Kumar said during the webinar. “Every single time Tesla has been counted out, they have been able to rise above it. But that said, it’s less about the promises made by Tesla, than the inherent limitations of physics when it comes to lithium ion batteries, when it comes to mining, that will dictate what the future will hold over here.”
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