Tesla introduces ‘million mile batteries,’ challenges power companies

Tesla Model 3 on roadway
Image: Tesla Motors

Tesla plans to introduce new low-cost, long-lasting batteries in its Chinese-made sedans in late 2020 or early 2021, reports Reuters. The electric carmaker will use the long-life cells it developed last year to bring the upfront cost of its vehicles in line with gas-powered automobiles.

The manufacturer also plans to utilize its high-capacity power packs to provide electricity to homes and businesses.

Tesla’s New Battery Innovation

Last September, Tesla CEO Elon Musk patented a new type of battery built with nickel-magnesium-cobalt oxide (NMC) crystals. Because of their composition, NMC cells have a higher energy density and degradation rate than traditional electric vehicle power units. As such, Musk’s innovative cells, developed in concert with Dalhousie University researcher Jeff Dahn, have a life of 1 million miles.

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Tesla currently utilizes nickel-cobalt-aluminum vehicle batteries that last between 300,000 and 500,000 miles.

In addition to their high capacity, Tesla’s new cells are more cost-effective as their composition is only 20 percent cobalt. Notably, that metal is the most expensive material used in the production of electric vehicle power units. The carmaker will source its NMC batteries, as well as cobalt-free lithium-iron-phosphate cells, from Chinese manufacturer Contemporary Amperex Technology Ltd (CATL).

The automobile company will also use design methodologies developed by CATL to reduce its power units’ weight and cost.

Reuters states CATL-made NMC batteries run $100 per kilowatt-hour while its lithium-iron-phosphate cells have below $80/kWh. The news service notes $100/kWh is the point at which electric vehicle costs become equivalent to gas-powered automobiles. Accordingly, Tesla’s change in power pack formulation could allow it to offer its cars and trucks outside the luxury range.

By comparison, General Motors and supplier Panasonic are not predicted to produce a $100/kWh vehicle power unit until 2025.

The electric car corporation plans to deploy the first generation of new cells in its Chinese manufactured Model 3s. Subsequently, the firm will sell vehicles equipped with more refined high-capacity power packs in other markets. Tesla eventually plans to fabricate its batteries in heavily automated complexes called terafactories that will have 30 times the footprint of its Nevada gigafactory.

Tesla, the International Utility Company?

Although producing cheaper batteries with greater longevity would greatly bolster Tesla’s bottom line, the company has grander ideas. The corporation wants to use its new cells to compete with electricity providers like Pacific Gas & Electric and Tokyo Electric Power.

In 2017, the manufacturer established a 100 MW/120 MWh lithium-ion battery system in South Australia to supplement the area’s power grid. After six months in use, McKinsey & Company found the facility reduced the region’s frequency control and ancillary services costs by 90 percent. Also, the plant, which cost about $66 million to build, produced $17 million worth of electricity in half a year.

Tesla, in tandem with its Redwood Materials affiliate, plans to recycle and recover the valuable metals in its batteries to construct new grid storage systems. Thanks to its innovative cell formulations, the firm could significantly increase its car sales, which would inevitably provide it with tons of new power plant components. Theoretically, the corporation could also use its terafactories to mass-produce massive new cells for usage in power grids.

Though Tesla’s plans to become a utility company are very ambitious, the firm has a track record of turning fringe ideas into billion-dollar technologies.


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