Dr Peter Harrop, Chairman of analysts IDTechEx, was interviewed 27 July by BBC Television World News in a live programme transmitted worldwide. The subject was the opening of the Tesla battery gigafactory billed as the world’s largest factory building. There had been talk in the press of this giving Tesla global battery dominance and even leading to ten times global battery output and the BBC sought reveal the true situation.
As battery experts, IDTechEx praised the Tesla initiative but pointed out that even this giant factory is only part of a huge ramp up of lithium-ion battery production where the East Asians are in the driving seat. The Tesla cells are by Panasonic of Japan which has invested $1.6bn in the project in addition to expanding its own facilities.
Tesla is copying $13bn BYD in China in making a range of electric vehicles, batteries and solar cells but BYD has its own battery cell technology. BYD is likely to have similar battery production capacity to Tesla in 2020.
Tesla intends to leapfrog. For example, while BYD is taking $1bn orders for pure electric buses, Tesla is preparing its first, radically different bus for sale. However, when it comes to batteries, BYD satisfies its own demand and tries to get competitors in vehicle manufacture to buy their batteries from it – tough to do. In contrast, IDTechEx believes that Tesla has limited interest in providing more than its own battery needs.
IDTechEx agreed with the BBC that the batteries are the main thing stopping most of us from buying pure electric vehicles but to triple the range of affordable electric vehicles, as we all desire, calls for more than economy of scale provided by gigafactories.
In addition, the key materials in the battery are being changed by all the leading battery manufacturers notably adding silicon into the anodes in a tricky way and chemistry such as different nickel manganese cobalt NMC for higher capacity cathodes. That will make them store more energy and save on overall vehicle cost.
Other changes will follow such as non-flammable electrolytes. IDTechEx therefore made the point that this is a risk on a risk – massive volume ramp up during radical change of what you make.
LGChem of Korea seems headed for 50GW production capacity by 2020 which is probably more than anyone else in the race for economy of scale. However, the key production of those clever new active materials lies mainly in Belgium, Japan and Korea though some key patents are owned by US organisations.
The Tesla Gigafactory is part of this bigger race to supply very different, large lithium-ion battery packs with their management electronics for everything from ships, buses and trucks to solar powered houses. IDTechEx believes there is even a possibility of shortages of large lithium-ion battery packs as the Titans prepare for battle.