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Rethinking Lithium cell production, implications for the GF

Discussion in 'TSLA Investor Discussions' started by JRP3, Jun 22, 2015.

  1. JRP3

    JRP3 Hyperactive Member

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    Most of the time I don't put too much weight into "revolutionary" battery articles, but this one has my attention, since it has the potential to make most of the equipment in the GF obsolete. It's still early and not ready for prime time but this process would drastically change the way lithium cells are made, speeding up the process and lowering costs. Short version, instead of using a long winding process with many layers this seems more akin to making a PB & J sandwich.
    http://qz.com/433131/the-story-of-the-invention-that-could-revolutionize-batteries-and-maybe-american-manufacturing-as-well/

     
  2. RobStark

    RobStark Active Member

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    "This machine, to be available for sale in two years, would be for stationary electric batteries—used to power businesses, neighborhoods and utilities, rather than cars.

    The machine would have a capacity of 79 megawatt-hours a year and produce any kind of lithium-ion battery for a cost of about $160 per kilowatt-hour. By 2020, Chiang says, that will be down to about $85, 30% below where conventional lithium-ion batteries—whose cost is also dropping—may be by then. But most importantly, the machine would be priced at about $11 million. Hence, the startup cost of getting into lithium-ion battery manufacturing would plummet,"


    It seems the price targets are comparable to GF but rendering economies of scale useless if this venture proves viable.

    They don't say how the stationary batteries are different from automotive application batteries or when a machine to make automotive batteries would be ready.


     
  3. austinEV

    austinEV Active Member

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    That is a very interesting article. I have long thought along those lines, the world doesn't need a better battery but a better battery making machine.

    I figure that even if the pilot plant uses the "wrong" tech, there is still 3/4 or more that is yet to be built. And, if the tech suddenly "unlocks" and gets cheap and easy like the article suggests, who is best poised to pivot and take advantage of this and scale quickly? In fact this may doubly benefit Tesla, to the extent that if the next generation of batteries can be made with in-house knowlege rather than being tied to Panasonic.
     
  4. uselesslogin

    uselesslogin Enthusiast

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    We can do the math for fun. The Gigafactory would be 10 million square feet. This machine is the size of a refrigerator. Lets assume a factory needs 100 sq. ft. per machine is needed when all support infrastructure is considered. That would mean the Gigafactory would support 100,000 of these machines. With an output of 79 MWh per machine the Gigafactory would be able to output 7.9 TWh. Now a refrigerator in general only takes up 10 sq. ft. of space. So, would it be possible to produce 79 TWh from a factory the size of the Gigafactory?

    The other math is $11 million per machine and the planned cell output at the Gigafactory is 35Gwh. That output would require about 440 machines and at a cost of $11 million each that is $4.4 billion just for the machines. So even if all these claims are true it isn't like Tesla's CapEx would go to waste and with similar cost targets they won't be at any significant disadvantage. It just means others will be able to enter the field and compete more easily with smaller initial scale.
     
  5. EarlyAdopter

    EarlyAdopter Active Member

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    A "semi-solid" battery with no binder or seperator would probably do poorly in a high G, high vibration environment like a car, hence the caveat these would only be suitable for stationary applications.

    - - - Updated - - -

    Nice. So Gigafactory2, dedicated to Powerpack/Powerwall production, could be a small corner of Gigafactory1 if these machines pan out.

    I don't see any invalidation in the Gigafactory here at all. Quite the opposite.
     
  6. Cosmacelf

    Cosmacelf Active Member

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    If they are targeting stationary, then there is a reason for that. This isn't just a new manufacturing method, it is also a new battery chemistry. So relative to a battery useful for automotive, it probably has low energy density, or low power density, or its volumetric or gravimetric density is low.

    So while it may impact Tesla stationary storage business, it won't affect the primary purpose of the GF, which is to make automotive batteries.

    The article is well worth reading though. It is interesting that they couldn't figure out a way to make flow batteries economical.
     
  7. FluxCap

    FluxCap Active Member

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    Much respect Rob, but let's not get carried away here. Elon has built the company to react and respond to real battery improvements over time, and this latest one (if feasible) only helps things in the longer term. Economies of scale with sufficient vertical integration across the supply chain like Tesla's cannot simply be made useless by making one component in the supply chain cheaper. There are thousands of steps from mining raw minerals for batteries to delivering cars to customers, and it is the sum total of these that provides the "moat" that is not easily replicable. More of an exponential function than a linear one.
     
  8. RobStark

    RobStark Active Member

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    Yes, they can.

    The implied assertion is that this new machine is so much more efficient that it almost perfectly negates the economies of scale in purchasing raw materials/components of the GF.

    Hence almost identical price projections at the cell level. $160 now and $85 in the future.

    Article says so advanced it is hard to believe. Curing time gets cut from 22 hours to 1 hour.

    Such advertised radical advancement should be met with a healthy dose of skepticism.

    But if they do realize their targets then they are hitting they same price target with $11M in capital investment as Panasonic with $800M-$2B in capital investment.

    Again these cells are only durable/good enough for storage not automotive applications.

    Nothing is stopping Tesla from using Panasonic for automotive cells and purchasing these new machines to make cells for storage.

    Using cheaper raw materials to feed this machine and lowering prices for Powerwall and Powerpacks.
     
  9. spaceballs

    spaceballs Member

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    From reading the article, I think these cells will have poor power density since there is less surface area.
     
  10. Zzzz...

    Zzzz... Member

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    Nope. At $11M for 79 megawatt-hours a year one would need to spend $4.9B to get 35 GWh annual output using many such machines. GF is WAY cheaper, at $5B it would produce cell precursors, battery packs, assembly. This offer would require ~$5B only for cell production, one would still need to build factory building, install other equipment to get to 35 GWh level etc.
     
  11. MitchJi

    MitchJi Active Member

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    Hi,
    That is incorrect:
    http://www.greentechmedia.com/articles/read/24m-unveils-the-reinvented-lithium-ion-battery

    They should be able to use all of their Jeff Dahn cell chemistry tweaks.
    If the technology is that good, and if Tesla can license it this will be a huge win for Tesla. They are rolling out their cell production equipment in (5 or 6?) phases. Total cost is about 1.2B. So they will take a 200-300 million hit on phase 1 equipment, but they will be able to scale GF1 to GF1-GF10 capacity for a lower total less they had budgeted for GF1!
     
  12. JRP3

    JRP3 Hyperactive Member

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    The more I read about this company the more I think they may really have something.

    I do hope Tesla is keeping a close eye on this, and hope they would invest a bit in the technology to have a "foot in the door" so to speak.
     
  13. stopcrazypp

    stopcrazypp Well-Known Member

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    While the improvement to latency and space is impressive (great for small scale makers), the throughput is more important for a large scale factory (the latency of multiple days doesn't really matter given the customer base buys in time intervals much longer than that). As others point out, the GF is still cheaper in the GWh/year metric.

    And the point about stationary batteries is interesting. The article doesn't touch on this in detail, but I suspect the speculation that such batteries aren't suitable in environments with lots of vibration probably is somewhat true.
     
  14. JER

    JER Member

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    The key thing being promised here is a huge reduction in the size and cost of an economically viable factory. If you can compete with the Gigafactory's capital and cell production costs per unit capacity without having to cough up half a billion, many more battery factories can open.

    Anything that lowers the entry requirements for becoming a battery manufacturer will help accelerate the growth of global cell production; tens of millions are a lot easier to find (and to risk) than half a billion, let alone five billion. Assuming it works, this innovation is significant progress towards making sustainable energy a reality in a relevant timeframe - which is actually Tesla's stated goal. Elon will have no right to complain. :wink:

    If they have no suitability for transport applications, these new cells aren't about to render the Gigafactory irrelevant. On the contrary, once they're proven Tesla may end up buying these cells to assemble into stationary storage products and keeping the conventional cell lines devoted to cars.
     
  15. Model 3

    Model 3 Active Member

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    Are you sure about that?

    This is only speculation from my side, but I think this is reasonable: I think that the contract between Tesla and Panasonic has a clause like "We, Panasonic, commits to invest in building a new battery cell factory at the Tesla owned "Gigafactory" on condition that Tesla commits to continue to buy 15GWh of cells produces at our existing factories in Asia". And here is where the PowerWall/PowerPack comes to play...
     
  16. RobStark

    RobStark Active Member

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    I am sure Tesla can use all 50 GWh for automotive use.

    If not in Teslas right away then selling powertrains to other OEMs.

    The financial press that worries Tesla will have too much capacity is all wrong.

    Tesla needs to worry about having too little capacity.

    That is why they have on again off again talks with Samsung SDI.
     
  17. Model 3

    Model 3 Active Member

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    Good point :)
     
  18. jbcarioca

    jbcarioca Active Member

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    Regardless of any specific emerging technology for production, chemistry or fundamental design, the current trajectory of GF planning has Tesla EV battery costs reaching rough parity with ICE within three years maximum, IIRC (I did not look up the references for this post).
    However, so far we have ignored the other huge cost factor, depreciation of the battery packs. Both Nissan and GM, faced with EV packs that become useless for original purpose at 70% capacity, are repurposing used EV batteries to use in standby stationary power packs.
    GM turns your old Chevy Volt battery into a whole-house UPS | ExtremeTech
    We might well consider the impact on total cost of ownership with this type of recycling. Unless my assumptions are seriously flawed the influx of numerous plugin hybrids as well as EV's will reduce both production costs and supply of recyclable batteries.
    My personal opinion is that we are very near the sort of recycling of EV batteries that is ubiquitous in the aerospace industry. If that does happen as scale the reduction in Tesla cost of battery pack warranty replacement should plummet. Will that become a larger factor than production scale economy? Maybe, since the largest portion of battery pack repalcements seems to be failure of the battery management system rather than the cells themselves.

    I do not want to change the subject, only point out that change in the business model is probably equal to or even more important than initial production cost reduction.

    As everyone keeps saying, the fundamental game changer is increase in energy density with equal or superior durability and performance characteristics. Elon would never say that increased range is no longer important if he could delivery three times the range with the same weight. He'd also be gleeful if temperature sensitivity would somehow be dramatically reduced.

    However we view these issues the specific prospect in this technology is far too speculative to offer anything dramatic in the near future, is it not?
     
  19. austinEV

    austinEV Active Member

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    Car batteries have to be:
    0) be manufacturable in volume
    1) high capacity per volume
    2) high capacity per weight
    3) high capacity per dollar
    4) low self discharge
    5) low degradation over 5-10 years
    6) Be ok with temperature change, large temperature range, and cycling
    7) Be ok with periodic high rate charging without degradation (Supercharging)
    8) resistant to vibration and shock
    9) crash safe

    Did I forget any? My feeling is that it is pretty easy to make batteries that are better than Panasonics classic in 1, 2,3 or even more categories and still be useless for cars.

    This article is interesting in that they are hitting the manufacturable question early, but we don't have enough info on all the other critera.
     
  20. mkjayakumar

    mkjayakumar Active Member

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    The article on 24M battery innovation led by MIT prof Yet-Ming Chiang had a pointer to another very interesting article on the history of Lion technology and its invention by Prof Goodenough - The man who brought us the lithium-ion battery at the age of 57 has an idea for a new one at 92.

    I strongly recommend you all read that. Prof. Goodenough had no royalties or patents on his Lion battery invention, because Oxford University didn't believe in patenting scientific advancements. But the story gets interesting that his next invention - Lithium Iron Phosphate - was stolen by a Japanese researcher sponsored by NTT working under him. And apparently Prof. Chiang used that technology to start A123, starting a bitter court battle between the two.
     

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