Tesla is advancing its ambition to undercut the cost of battery cells supplied by external manufacturers with its proprietary 4680 format, slated to achieve cost parity by the end of 2024. The 4680 cell, leveraging cutting-edge technologies such as tabless designs, was unveiled in 2020 with the promise of delivering superior affordability, extended range, and faster charging capabilities.
Venturing into cell production marked a significant departure for Tesla, pitting it against industry behemoths like LG, Panasonic, and CATL, which currently serve as Tesla’s primary cell providers. Despite this competitive landscape, Tesla has maintained a cooperative relationship with its suppliers, continuing to procure a substantial volume of cells from them.
The 4680 program has encountered challenges, including production scaling issues and concerns over cell cost and performance. However, in its Q1 2024 financial results, Tesla provided an update on the program’s progress. Lars Moravy, Tesla’s Vice President of Vehicle Engineering, stated, “4680 production increased about 18%, 20% over from Q4 – reaching greater than needed for Cybertruck, which is about 7-gigawatt hours per year as we posted on X.” Moravy expressed confidence in maintaining a production pace that exceeds the Cybertruck’s requirements, highlighting ongoing efforts to enhance production efficiency and lower costs.
While the update appears promising, the absence of specific cost data leaves room for interpretation. Nonetheless, Moravy made a noteworthy statement regarding Tesla’s belief in achieving cost superiority over nickel-based cells from suppliers by year-end, excluding lithium-iron-phosphate (LFP) cells. Nickel-based cells, known for their higher energy density, are typically used in electric vehicles offering longer ranges. Presently, Tesla’s 4680 cells are exclusively integrated into the Cybertruck model.
