June 2, 2020—Electric car maker Tesla plans to introduce a new low-cost, long-life battery in its Model 3 in China later this year or that it expects will bring the cost of electric vehicles in line with gasoline models, and allow EV batteries to have second and third lives in the electric power grid, according to a Reuters report.
Tesla CEO Elon Musk plans to reveal the technology advances, which were developed with China’s Contemporary Amperex Technology Ltd (CATL) during a “Battery Day” in late May.
Eventually, those batteries will also be introduced in other markets, including North America.
Tesla's new batteries will rely on innovations such as low-cobalt and cobalt-free battery chemistries, and the use of chemical additives, materials and coatings that will allow the batteries to store energy for longer periods, according to the report. Tesla also plans to use heavily automated battery manufacturing processes to reduce labor costs and increase production.
Tesla uses CATL's lithium iron phosphate batteries, which use no cobalt, the most expensive metal in EV batteries, as well as CATL’s simpler way of packaging battery cells.
Those advances, in terms of both battery technology and manufacturing, are in service of the same goal: reducing the cost of electric vehicles, in hopes it will convince customers not to stick with internal combustion vehicles.
Demand for electric vehicles is driven largely by regulations to curb emissions in China and the EU. It wasn’t until mid-2018 that the U.S. market achieved the 1 million EV-mark, where each sale included at least $7,500 in tax incentives.
The cost of electric vehicles remains a challenge for automakers, mainly because of the high battery costs, which accounts for one-third of the vehicle’s total cost.
A recent report from the MIT Energy Initiative warned that electric vehicles’ reliance on lithium-ion batteries might prevent them from ever achieving the same sticker price as conventional gasoline-powered vehicles. While the cost of lithium-ion batteries has declined steadily, that decline is expected to slow over the next several years as they approach limits set by the cost of the raw materials.
However, that could change with Tesla’s announcement.
The cost of CATL's cobalt-free lithium iron phosphate battery packs has fallen below $80 per kilowatt-hour, with the cost of the battery cells dropping below $60/kWh, according to Reuters. CATL's low-cobalt NMC battery packs are close to $100/kWh.
To be comparable to internal combustion engine vehicles, the kilowatt per hour must fall below $100.
In comparison, the new low-cobalt batteries being jointly developed by General Motors Co and LG Chem are not expected to reach those cost levels until 2025, according to the Reuters report.
Despite these challenges, automakers are forging ahead with new models at various price points—and Tesla’s advancements could increase the sales of those vehicles.
The industry impact? It’s plentiful.
For mechanical repair shops, the time is now to start investing in and training on how to service these vehicles. The market will be there, and it’s up to progressive shop owners to become the experts in their areas.
For body shop owners, on the other hand, who may have already serviced hybrids for decades, it’s all about re-education. Recent webinars from CCAR and Society of Collision Repair Specialists (SCRS) detail the high-voltage systems that exist in electric vehicles, and the safety precautions needed.
“All electric vehicles feature complex electrical systems that contain high voltage components, such as lithium-ion batteries and other potentially lethal components and cables,” said SCRS about the video. “It is critical that collision repair center staff understand the safety implications of working with and around high voltage systems. Collision repair businesses should have a documented procedure plan for intake, and work on, high-voltage vehicles. It is the duty of all persons involved in controlling, operating, testing, working on or in the vicinity of electric vehicles or high-voltage components, to implement safety rules and comply with them.”
