Tesla's goal is to accelerate sustainable energy. However, today, only about 1% of cars on the world's roads are electric, which means that Tesla still has a long way to go.
This also presents an incredible opportunity, which Tesla is eager and well-positioned to continue taking on. Since batteries are a bottleneck in the widespread deployment of EV production, the main challenge is to scale up battery production. Nevertheless, as soon as Tesla fixes all the problems and configures this process, the company will be able to rapidly deploy the production of battery cells around the world, ARK Invest believes.
After the Q4 2020 Earnings Call, ARK analysts Sam Korus and Tasha Keeney made a few takeaway remarks regarding batteries. They pointed out that Tesla highlighted that batteries are the biggest obstacle to scaling up EV production. Tesla itself plans to produce 100 gigawatt-hours of batteries in 2022, enough to supply an additional 1.3 million vehicles, up from the 500,000 produced in 2020, but this will take time.
The in-house cell manufacturing system that Tesla unveiled at Battery Day contains new processes and equipment, so the company initially expected some unknown technical problems to arise during the manufacturing process. Tesla reported that their team at Kato has been able to resolve every production problem presented to date, and continues to increase yields and rates by week and month.
In terms of capacity, Tesla already has 10 gigawatt-hour-capable equipment delivered to Kato, virtually all production personnel are hired, and the material supply chain is in place. Thanks to this, the team plans to fully increase production this year. Tesla also reported that, thanks to the 4680 trial production line, the company has acquired sufficient technical confidence to begin construction of production equipment and facilities to reach its goal of 100 gigawatt-hours by 2022.
ARK points out that, once Tesla established Model 3 production in Fremont, the company was able to quickly build a new plant in China and scale production in no time. Therefore, they have no doubt that the same will happen with the establishment of the production of batteries.
"After troubleshooting the process in one factory, we believe Tesla should be able to ‘copy and paste’ in similar factories around the world much more rapidly than expected."
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About the Author
Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.