How will Tesla’s Gigafactory reduce cost? — update

Chevrolet Volt battery pack uses proprietary cells
Credit: GM/Green Car Reports

Electric vehicle (EV) manufacturers use lithium iron phosphate cells, connected together to form a battery pack for electricity storage. Almost all use proprietary cells.

Almost all — Tesla is the exception, using 18650¹ size laptop cells. Why 18650? Because they are commodity cells. I.e. multiple large volume manufacturers world-wide, for widespread use in multiple applications (including laptops), has reduced cost by competitive, volume production.


AA cell left, 18650 cell right
Credit: Kaayee Electronics

18650 cells are cheaper than the proprietary cells used by other EV manufacturers, both individually & per kWh of capacity. But it’s not all good news: each individual cell is smaller, so more of them are required to construct a battery pack of a given capacity. Thats more wiring, & more connections, which adds to cost.

Tesla’s Gigafactory, as its name implies, will not just add a few percent to annual world production. Planned 2020 Gigafactory production will exceed 2013 global production².

In addition to volume of production, there is reason to believe that Tesla will also force costs down by changing the volume of the cells themselves³. A slightly larger cell of 20700 size (i.e. 2 mm wider, 5 mm longer than 18650) will be 33% larger in volume⁴, with a similar effect on storage capacity, for negligible increase in cell cost. There has also been speculation about 26650 cells⁵ (8 mm wider, same length as 18650).

For a given pack capacity, using 20700 cells will yield a battery pack containing 33% fewer cells & a similar reduction in wiring & connections, further reducing cost.

In summary, pack cost is expected to be reduced by:
1. volume cell production
2. reduction in cell count & cost
3. reduced pack assembly costs
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¹ 18650 — what do those numbers mean?
Rather than continue with the multiple, chaotic naming systems used for other battery chemistries, a naming system which specifies the physical dimensions of lithium ion cells has been adopted:
first 2 digits: diameter in mm — 18 mm diameter for 18650
last 3 digits: length in tenths of a mm — 65.0 mm length for 18650
AA size in a lithium cell is 14500 — 14 mm diameter x 50.0 mm length
AAA lithium cell is 10400 — 10 mm x 40.0 mm
Length is specified to one tenth of a millimetre because it is a more critical dimension for making a good electrical contact.
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² Tesla Motors: "Planned 2020 Gigafactory Production Exceeds 2013 Global Production", https://www.teslamotors.com/sites/default/files/blog_attachments/gigafactory.pdf
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³ Advanced Automotive Batteries: "The Tesla Battery Report", p10 https://www.advancedautobat.com/industry-reports/2014-Tesla-report/Extract-from-the-Tesla-battery-report.pdf

CleanTechnica: "Lighter Batteries May Prove The Tipping Point For Electric Vehicles",
http://cleantechnica.com/2015/03/17/lighter-batteries-may-prove-tipping-point-electric-vehicles/
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⁴ 18650 versus 20700 cell volume

18 x 65.0 mm cylinder = pi x (18/2)^2 x 65 = 16,540 mm³

20 x 70.0 mm cylinder = pi x (20/2)^2 x 70 = 21,991 mm³

Relative volume = 21,991/16,540 = 1.33 = 133%

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⁵ Manager Magazin: "Tesla baut seine Autos künftig ohne die legendären Laptop-Batterien" — Google Translate assures me this means, "Tesla builds its cars in the future without the legendary laptop batteries"
http://www.manager-magazin.de/unternehmen/autoindustrie/tesla-stellt-in-gigafactory-nicht-batteriezellen-vom-typ-18650-her-a-998973.html / Tesla Motors Elon Musk LiIon lithium ion lithium iron phosphate LiFeO4 charge recharge battery Model S Model 3 III range capacity kilo Watt hour Supercharger /