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Industry experts note that while dry-coating techniques have been successful in smaller-scale applications, replicating this success for large EV batteries at mass production speed remains a formidable challenge. Tesla’s unique approach, which involves developing its own equipment and tools, adds to the complexity. Currently, the 4680 battery cells produced are sufficient for only about 24,000 Cybertrucks annually, a fraction of the targeted output. This bottleneck significantly impacts Tesla’s ambitions to dominate the electric pickup market, where it faces stiff competition from rivals like Ford’s (NYSE:F) F-150 Lightning, Rivian’s (NASDAQ:RIVN) R1T, and General Motors’ electric Hummer (NYSE:GM).
Market Overview:
-Tesla’s long-awaited Cybertruck faces delivery delays due to limited 4680 battery -production.
-Pioneering dry-coating technology proves challenging, hindering ramp-up of battery cell output.
-Current production rate at Giga Texas falls short of targets, fueling concerns about ambitious 2025 goals.
-Tesla struggles with scaling cathode processing and handling high-speed electrode coating equipment.
Key Points:
-Dry-coating anode production stable, but cathode technology remains a major hurdle.
-Scaling challenges lead to higher scrap rates and uneven electrode thickness, further limiting output.
-Lack of robust quality verification system adds to production complexities and potential defect risks.
-Rivals like Ford’s F-150 Lightning and Rivian’s R1T gain ground while Cybertruck waits in the wings.
Looking Ahead:
-Tesla’s ability to crack the dry-coating code for cathodes will determine its 4680 ambitions.
-Replicating production know-how across multiple lines and improving quality control remain crucial.
-Delays could put pressure on Musk’s 2025 targets and open the door to increasing competition in the electric pickup market.
-Investors will closely watch Tesla’s progress in scaling 4680 production and its impact on future vehicle launches.
The situation is exacerbated by the fact that Tesla’s dry-coating process for cathodes isn’t currently any faster than traditional wet methods, and the company faces high scrap rates during production ramp-up. Tesla’s strategy involves first establishing a stable production process before scaling up, a method that promises exponential growth once mastered. However, each new production line presents its own set of challenges, with scrap rates potentially soaring during initial months.
These production challenges have wider implications, not just for the Cybertruck but for Tesla’s entire vehicle lineup, particularly the planned $25,000 small car. With limited production capacity for 4680 cells in Fremont and dependency on suppliers like Panasonic (OTC:PCRFY), Tesla’s ability to meet its ambitious production targets across various models remains uncertain. The company’s continued struggle with scaling up its innovative battery technology underscores the complexities and risks associated with pioneering new manufacturing processes in the rapidly evolving EV industry.
This article was originally published on Quiver Quantitative
