Tesla Aims to Achieve 1,000 GWh per Year of Battery Production in the US, with Cells at $70 per kWh

Photo: Tesla

Tesla aims to achieve 1,000 gigawatt-hours per year of battery production in the US, which should be a strong contribution to the global goal of 300 to 400 terawatt hours for the transition to sustainable energy. At this stage, the company plans to achieve a production cost of $70 per kWh at the cell level before receiving incentives, which should help achieve the goals.

The path to a successful transition to sustainable energy lies in reducing the cost of manufacturing battery cells. While no specific numbers have been released, the information provided by the company hints that Tesla, with its 4680 battery cells, is in the lead. During the Q3 2022 Earnings Call, company executives shared some details that shed light on the situation.

Elon Musk said the ramp-up of the company's battery cells introduced in 2020 is going very well. Zachary Kirkhorn explained that Tesla is currently focusing on “shifting from 100% ramp to cost and further expanding production capacity in North America.” This means that in the near future, reducing the cost of their production will become a priority. Musk explained that once manufacturing is fully integrated, the company expects to reach around $70 per kilowatt-hour at the cell level before any incentive.

Company executives explained that they expect their US battery manufacturing to fully meet the Inflation Reduction Act's (IRA) requirements. The IRA could provide a significant boost towards accelerating automation while also scaling the battery supply chain in the US. For now, Tesla is waiting for the Treasury to release clear requirements to see what the company can expect. If Tesla passes them, which could potentially result in a reduction in the cost of manufacturing their batteries by tens of dollars per kilowatt-hour, this would have a really big positive impact.

Already, in the battery industry, Tesla is moving fast towards the goal of reaching 1,000 gigawatt hours a year of production capacity in the US. “We're moving at top speed to do that,” Musk said.

Ultimately, in order to successfully transition to sustainable energy, according to Tesla's calculations, the world will need 300 to 400 terawatt hours in stationary energy storage systems and in vehicles. “Yes, there's roughly -- to transition to sustainable energy, our calculation for both stationary and vehicles is 300,000 to 400,000-gigawatt hours or 300 to 400 terawatt hours,” Musk added.

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