Musk says 4680 battery could cut Tesla's costs by nearly $40,000, analysts say too optimistic

 Sept. 6 (Xinhua) -- For Tesla CEO Elon Musk, one of the keys to selling 20 million cars by 2030, or even launching a $25,000 affordable car, is to achieve groundbreaking battery technology and lower battery costs.

To that end, Tesla has introduced the 4680 battery, which features larger cells and new dry electrode coating technology. If all the potential efficiencies of the new cells are realized, the 4680 battery pack for the Model Y will cost $5,000 to $5,500 (about $35,000 to $38,000) less to manufacture, or about half the cost of the 2170 battery pack, people familiar with the matter said.

Musk told shareholders in August that Tesla expects to achieve mass production of the 4680 battery by the end of this year. But Stan Whittingham, co-inventor of the lithium-ion battery and a 2019 Nobel laureate, thinks Musk is too optimistic about the commercialization timeframe for the new technology.

Experts say Tesla is currently only able to reduce the cost of the Model Y's battery by $2,000 to $3,000 (about $14,000 to $20,000), about half of what Tesla expected when it introduced the 4680 battery two years ago. And the cost reduction comes mostly from the new cell design, which is larger than the cells in Tesla's existing 2170 battery. The key to Tesla's cost reductions is the dry electrode coating technology, which Musk has called revolutionary but not mass-producible.

Tesla can make small batches on the dry electrode coating technology, but when they start mass production, there are too many defective products, people familiar with the matter said. Production yields were so low that all the expected cost savings from the new process were wiped out. "They weren't ready for mass production." One expert said.