I, Brian Wang, made a video that puts together evidence that Tesla has already largely solved its battery supply problem. It is not 4680 batteries. It is not a solution that is coming later in the year. It is a supply solution that already reached a tipping point in 2021.
Battery supply has long been the biggest problem and limitation for Tesla. The impacts of this solving battery supply would be the biggest story for Tesla in 2022 and it would have the largest financial impact in the first 6-9 months of 2022. It would have continuing financial impact even with a ramp of 4680s. 4680s and the new factories will be huge but this would be even bigger.
Solving the battery constraint is having an abundance of battery supply so that other factors are constraining production. In December 2021, Tesla grew monthly production by 19% over November 2021. This single-month leap in production is what Tesla can do when they have enough batteries.
This was not a one-month freak occurrence. This is battery abundance that will last, continue and grow. Tesla still has more battery supply to use to grow monthly car production in January and February and beyond. Any limitations in car production will mean batteries will go in significant quantities in megapacks.
Drone video of 18 model Ys in ten minutes and 11 model 3 in ten minutes. This would be 3828 cars per day with 22 hours of operation. 300 days of operation would be 1.15 million cars.
Tesla started building a new Megafactory (for megapacks) in Lathrop, California in 2021. Megapacks are Tesla’s utility-scale energy storage system. Megapack production capacity will rise to 50GWh by the end of 2023. 20.73GWh will be available by the end of 2022. By 2023, Tesla is expecting to be producing 47.48GWh per year. New MP2-XL megapacks are being made. They will be physically larger but will be cheaper to produce than the current MP1 system and will use CATL Prismatic LFP cells.
Tesla would be going from about 5% of batteries for energy storage (3 GWh out of 63 GWh) to 12% (21 GWh out of 180 GWh). This is in the scenario that Tesla without battery supply constraints makes 2.5 million cars in 2022.
The abundant supply of batteries is from CATL Prismatic LFP cells. Tesla only started using CATL LFP cells in the last quarter of 2020.
CATL just completed a new LFP battery factory beside the Tesla Shanghai car factory. The CATL LFP factory was completed in record time. CATL did not need to build the buildings. The correct size buildings existed and this saved 7-9 months of construction. However, the ramp-up to 60% of 80GWh per year of capacity occurred in 3 months instead of 12 months. LFP battery capacity from CATL and BYD has grown much faster than nickel-based lithium battery capacity from Panasonic or LG Chem. This new development is CATL taking the speed of ramping LFP batteries to the next level. Tesla is best positioned to take advantage of CATL battery production success and further success for the entire battery industry with the shift to rapid LFP battery factory production.
Reports are that Tesla is getting 45-48 GWh of batteries from CATL in 2022. This is about 4 GWh per month, which is double the amount of batteries Tesla used in December 2021 to make 66000 cars in Tesla Shanghai in one month. This is 800k cars in one year with 60 kwh packs. Tesla made 115,000 cars in December, 2021. This is an annualized runrate of 1.4 million cars. Adding 800k cars in 2022 would be 2.2 million cars.
There is video evidence of Model Y emerging from the Tesla China factory every 38 seconds. Tesla Model 3 in China had similar production rates. If battery supply is available and other supply chain to sustain Shanghai peak production at 38 seconds for each model 3 and model y with ten percent downtime then Tesla China can produce 1.1 million cars per year or 90,000 cars per month. There is $188 million going into the further expansion of Tesla China and this expansion is to complete in April.
Elon said at a 2021 investor call that battery suppliers would be able to double Tesla’s battery supply. The growth of battery supply from Panasonic and LG Chem is relatively tiny at about 10-20%. The biggest and fastest-growing battery supply partner for Tesla is CATL.
December, 2021 would then be the first month of a perhaps four to six month process of Tesla fully ramping and adjusting to unconstrained battery supply. LFP for all standard range vehicles globally and nickel batteries for premium cars. The 4680s will go to the new Semi and cybertruck models and perhaps some other premium versions of the Model Y or Model S.
The CATL factory would be the first of many. The Tesla expansion in Shanghai would be the first of many more expansions.
Other battery makers would be able to get in on the LFP wave later in 2022 as key LFP patents expire in 2022.
Demand for Tesla EVs grew ahead of the supply in 2021. Tesla EV supply will be able to grow more quickly to keep up with the continuing growth in demand. The supercharged demand saw backorders of 500,000 cars in 2021 despite increasing Tesla car prices by $7000 per car and Tesla increasing production by 86% from 2020.
Both Tesla EV supply and demand are shifting to faster growth in the less limited battery phase.
Key things to watch in 2022. The monthly China production and sales numbers from the China Passenger Car Association. The quarterly volume numbers from Tesla. The quarterly volume numbers are typically reported two days after the close of a quarter.
SOURCES- Analysis from Brian Wang, Tesla, CATL, Drive Tesla Canada
Written by Brian Wang, Nextbigfuture.com (Brian owns shares of Tesla)
Brian Wang is a Futurist Thought Leader and a popular Science blogger with 1 million readers per month. His blog Nextbigfuture.com is ranked #1 Science News Blog. It covers many disruptive technology and trends including Space, Robotics, Artificial Intelligence, Medicine, Anti-aging Biotechnology, and Nanotechnology.
Known for identifying cutting edge technologies, he is currently a Co-Founder of a startup and fundraiser for high potential early-stage companies. He is the Head of Research for Allocations for deep technology investments and an Angel Investor at Space Angels.
A frequent speaker at corporations, he has been a TEDx speaker, a Singularity University speaker and guest at numerous interviews for radio and podcasts. He is open to public speaking and advising engagements.