Tesla’s Shift To Cobalt-Free Batteries Is Its Most Important Move Yet

One of the main reasons we’re not all driving electric vehicles is the price. If you compare the cost of an EV with a similarly specified Internal Combustion Engine (ICE) car, it will be at least £10-15,000 ($12,500-$19,000) more expensive. The EV will be much cheaper to run after purchase, but there’s no denying that this massive initial premium is a considerable disincentive to widespread early adoption. Although some of this extra expense will be because companies are trying to claw back the development costs of the new technologies involved, the vast majority comes from one thing – the high price of rechargeable batteries. This is why some of Tesla
TSLA
’s recent advancements in batteries are its most important developments so far, but most significantly its shift away from cobalt.

To put this in perspective, let’s take an example. In the UK, the Tesla Model S Long Range starts at £77,980 ($98,000). This car boasts a range of 379 miles (WLTP), and the Plus version pushes this to 402 miles. But to achieve these high figures, the Model S incorporates a hefty 100kWh allocation of lithium ion batteries. Tesla doesn’t state publicly how much of the Model S’s price comes from these batteries, but you can get a general idea by looking at how much a Tesla battery pack costs if you purchase one from a classic car EV convertor, such as Electric Classic Cars in Wales. The Tesla batteries this company sells are second hand, from cars that are no longer roadworthy in some way (perhaps crashed…). A single unit with 5.3kWh costs £1,440 ($1,800) including taxes.

The current Model S would require 19 of these to reach its 100kWh capacity. If you multiply this out from the single-unit cost, that’s £27,360 ($34,500) in total. In other words, over a third of the price of a Tesla Model S could be just the cost of the batteries. More modest, entry-level EVs nowadays still have at least 40kWh (such as the basic Nissan Leaf), and most have 50kWh or more. So most EVs will include more than £10,000 ($12,500) just in batteries alone, which goes a long way to explaining why they are so much more expensive. Bloomberg New Energy Finance corroborates these calculations, putting batteries at 30 per cent of an EV’s cost in 2020. In comparison, an ICE car just has the cost of a metal box to contain its fuel.

This brings us back to some recent Tesla announcements. The company is placing a huge bet on rechargeable battery technology that doesn’t use cobalt. This is one of the main elements making lithium ion batteries so expensive. It’s also fraught with political issues, since the mining can be in conflict areas like the Congo, and its production is considered quite polluting of the environment. But cobalt is used because it enables the energy density required in batteries intended to last for hundreds of miles per charge.

A couple of months ago, it was revealed that Tesla was working with CATL on lithium iron phosphate (LFP) batteries, and these could be the real gamechanger. LFP batteries don’t use cobalt and have a roadmap to push well past the magical $100 per kWh (wholesale) that is considered the threshold for EVs being cheaper than ICE vehicles. Batteries once cost over $1,000 per kWh in 2010, then $381 in 2015, and are now at around $147 per kWh, according to James Frith, head of energy storage at Bloomberg New Energy Finance. Frith estimates that LFP batteries will hit $100 per kWh by 2023 or 2024, and just $61 by 2030.

Tesla has also recently patented technology for cathodes that significantly improves the number of charge cycles. Current lithium-ion technology allows for somewhere between 1,000 and 1,500 charge-discharges, which might not seem like a lot, but you don’t recharge a car everyday like a mobile phone, and intelligent management will spread the charging cycles between the separate cells. You only need to charge an EV with a decent range every week or so, which would mean 1,500 charge cycles could last 25 years. The new Tesla technology, patented by the company’s battery team led by Jeff Dahn, can increase charge cycles to nearly 4,000, which would be more like 75 years if charged once a week – hence the talk of million-mile batteries. More recently, the Tesla team headed by Jeff Dahn patented some new technology for lithium metal/anode free batteries, which could drastically improve energy density and thereby considerably reduce costs. These technologies, if they become commercially viable, could revolutionize battery durability and price, and there’s another technology called all-polymer batteries on the horizon that is being developed by a former Nissan senior researcher, which he claims could cut 90% off the current price.

But these are improvements for the future that may not happen, and cobalt-free lithium iron phosphate batteries are here now. Tesla will be using LFP for the batteries in its Chinese Model 3, after receiving government approval to do so. It is estimated that using LFP batteries will allow a 15-20% reduction in manufacturing cost. Taking calculations regarding how much of a car’s cost is batteries into account, this could make EVs a mere 10% more expensive than ICE instead of 30%, which will be easy to regain in cheaper running costs over a year or two of ownership. It will also give EVs an even greater lead over fuel-cell technology, making it even less likely that hydrogen will be the future of electric cars. The time is fast approaching when EVs are not just more ecological and cheaper to run than ICE cars, but cheaper to buy too, and batteries free of cobalt are a key step in that direction. That’s why Tesla’s shift to LFP is so significant – it could be the final nail in the coffin for fossil fuel vehicles.