Tesla Giga Texas Battery Factory Will Enable 70% Lower CapEx per GWh than Industry Norm

Tesla Giga Texas Battery Factory Will Enable 70% Lower CapEx per GWh than Industry Norm

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Tesla continues to improve the 4680 battery cell and its production methods. The Tesla Giga Texas battery factory will provide 70% lower CapEx per gigawatt hour than typical cell factories, according to a management statement.

The Tesla battery cell presented at Battery Day in 2020 is a strong competitive advantage for the manufacturer. The production and use of 4680 battery cells in the company's vehicles will reduce the overall cost of the cars, making them affordable to even more consumers. The progress of the company in this direction is very important for the company and its investors, which is why Tesla management gave an update during the Q1 2023 Earnings Call.

Andrew Baglino, SVP, Powertrain and Energy Engineering at Tesla, recalled that on Battery Day, the company presented a plan to reduce costs through 2026 across five areas of effort. Tesla discussed the cell design, anode and cathode materials, the structural pack concept, and the cell factory itself. SVP said that since then, the company has made progress in all these areas.

Baglino also mentioned the progress of the 4680 battery start-up at Giga Texas, sharing more specific details. According to him, the factory is halfway through construction and commissioning. Once it is in full operation, selling and operating will be 70% lower CapEx per gigawatt hour than typical cell factories. Baglino said the company continues to look for densification and investment reduction opportunities at future factories such as Nevada.

“For the cell factory, the Texas 4680 factory is partway through building and commissioning and selling and operating will be 70% lower CapEx per gigawatt hour than typical cell factories when fully ramped, in line with what we described on Battery Day.”

Another interesting detail is that Tesla is working not only with the first generation 4680 cells, which were introduced in 2020 but with the second, a “more manufactural version in Texas today,” according to Baglino.

The company also said it would start building the Corpus Christi Lithium refinery in May. Tesla's goal is to start commissioning part of the facility before the end of 2023. To obtain lithium there, the company will use “the sulfate-free spodumene refining process with reduced process costs, no acid or caustic reagents, lower embodied energy. It actually produces a beneficial byproduct that can be repurposed in construction materials,” Baglino said.

He said that as far as the cathode precursor is concerned, Tesla has successfully demonstrated the “lower process cost, zero waste water precursor process that we described on Battery Day at both lab and pilot scale and are in the detailed design phase for incorporating this technology into the front end of our Austin cathode facility.” In cathode manufacturing, Tesla has installed 50% equipment and 75% utilities in a new cathode building in Austin, with the goal of starting dry and wet commissioning this quarter and next quarter with a target to produce first material before the end of the year.

Baglino also said Tesla saw big improvements in battery pack manufacturing with the 4680 cells and the structural pack concept. A 50% lower CapEx and 66% smaller factory for the same output in gigawatt hours per year was seen.

In Q1 2023, the 4680 cell development and production team achieved significant improvements in price and quality. Giga Texas production increased by “50% quarter-over-quarter, through yields increased 12% and peak rate increased by 20% and through yields improved by 20%. Altogether, the team accomplished a 25% reduction in COGS over the quarter and we are on track to achieve steady-state cost targets over the next 12 months. And going forward for the rest of the year, the priority one is to yield in cost for the 4680 program as we steadily ramp production ahead of Cybertruck next year,” Baglino said.

© 2023, Eva Fox | Tesmanian. All rights reserved.


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About the Author

Eva Fox

Eva Fox

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.

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