Elon Musk’s influence over legacy industry has almost no modern precedent. Like Jeff Bezos’ shakeup of retail, automobiles in the 2020s and 2030s seem to be shaping up as Musk alone has reimagined them. Virtually every automaker, large or small, is piling into Musk’s electric world, with claims they will grab a significant slice of it.
Musk’s latest jerk of the wheel came this week with “Battery Day,” a long-teased event at which the Tesla CEO unveiled a sweeping, top-to-bottom recontemplation of the lithium-ion battery and how it is manufactured. The result, he said, would be a 56% cut in battery costs, finally opening up the mass market with $25,000 electric vehicles.
The market sent Tesla’s shares down more than 6%, and disappointed Wall Street analysts who said the presentation was light on details. But investors and analysts will need to catch up: Many battery experts themselves are treating what Musk described as a fait accompli.
In interviews, battery experts told me that Musk seemed to be understating the timeline — it looks closer to 2030 than his claim of 2023. But what he described, arriving late or not, is the new bar for both legacy automakers and startups, seeming to eclipse almost everything in the commercial pipeline. “Others have elements of what he is doing, but no one is doing it all,” said Gene Bershidevsky, CEO of Sila Nanotechnologies, a Silicon Valley-based battery startup and a key early Tesla employee.
On Thursday, two days after the event, Venkat Viswanathan, a professor at Carnegie Mellon, said that he still had not fully digested all that Musk presented — and that it could require a phalanx of top battery experts to adequately analyze.
And what is that new bar? James Frith, head of energy storage at BloombergNEF, said that by his calculations, Musk was describing a new battery cost of about $56 per kWh. That is down from an average cost today of around $150 per kWh. (Tesla’s are currently lower, at $130.) He gets there by reconfiguring both electrodes, eliminating whole stages of manufacture, intensifying automation, mining metals more efficiently, tapering the length of supply lines, removing hundreds of parts from the EV, molding large sections of the vehicle as a single piece, and more.
As we have reported, the very leading edge of EV batteries is an attempt to commercialize metallic lithium or silicon anodes, which would allow vehicles to travel much further and cost much less. But Musk’s proposals may reduce the need for these exotic advances.
I asked Gene Berdishevsky, the Sila Nano CEO, what would happen if his own silicon anodes — when they are ready for the market — were added to Musk’s proposed battery transformation. “If he gets to $60, we can get well below $50 — maybe even $40,” he said. “Fifty dollars would be just transformational.”