Tesla’s Next Revolutionary Battery

Musk is about to gain a massive advantage in the EV market in an unusual way.

Tesla started, and has gone on to dominate, the electric vehicle market. No one comes close to their infrastructure, charge speeds, technology, price or allure. But, a storm is brewing on the horizon that threatens to derail the EV movement. However, Musk has a plan to turn this upcoming catastrophe into another leg up for Tesla. Elon and his engineers have a new battery that could allow them to take ultimate command in the EV race. But what is this new battery? And can Tesla really take a greater lead in the EV world?

Before we dive into the new battery, we first need to understand the looming disaster on the horizon for electric vehicles (EVs). In fact, this is a self-made disaster as EVs are just too good. Manufactures are already struggling to supply enough EVs to meet the skyrocketing demand for them. To make matters worse there are shortages of some crucial materials further stifling supply. But the demand for EVs grows each year and these shortages seem set to get worse too, causing our upcoming catastrophe.

The materials shortage is the major problem. Demand has already sent lithium prices to an all-time high as mines struggle to scale up. To make matters worse, there is a nickel shortage (a vital part of modern lithium-ion cells) caused by recent sanctions against Russia, who produce a third of the world’s nickel. Both of these have created a significant bottleneck in the supply chain for EV battery production which will cause battery prices to hit the roof and even a shortage of available batteries.

Many have likened this upcoming squeeze to the chip shortage that blighted tech companies and the automotive world following Covid19. However, it is set to be far worse than that. In fact, it is so bad that the CEO of Rivian said “semiconductors are a small appetizer to what we are about to feel on battery cells over the next two decades.”

This is because a battery pack is over 30% of the cost of an electric car. If it costs more to build the battery the price of the vehicle will increase dramatically. With projected demands for EVs, coupled with these bottlenecks, it is feasible that in a decades or so EVs will sell for 50% more than they do today.

But, this won’t happen to Tesla because Musk saw this coming and he has a two-part plan.

Firstly, manganese. Lithium-ion batteries with manganese enriched cathodes have some staggering advantages over our current ones. They can be made cobalt-free, which is one of the most ecologically damaging parts of a battery, not to mention the humanitarian issues with its mining. They also have a far better safety margin, which allows them to be pushed harder without exploding or catching fire. This also means, in theory, they could have a higher energy density as well as faster charge speeds.

All of that is great, but it isn’t why Tesla is looking at manganese. Instead, it’s because manganese enriched batteries use half as much nickel as our current cells. This causes them to be far less affected by supply chain and price issues in the nickel market. Overall this means that Tesla EV battery packs could soon become the cheapest on the market by far as nickel prices soar.

What’s more, manganese is far more abundant on Earth than nickel, so even if other manufacturers copy Tesla, supply can easily meet demand, and no price crisis will happen. This is why we used nickel to make coins as there is an abundance of it.

However, that only solves one bottleneck. What about lithium?

Well, this is where the second part of Musk’s plan comes in. Tesla has already secured a long-term contract with the world’s largest battery-grade lithium supplier, which effectively makes them first in the queue. So Tesla will always have enough lithium to make their batteries unlike other manufactures who might not be able to source enough. But Tesla will still have to pay market price, meaning they can still be effected by a rising prices.

To solve this Musk found a brilliant solution to this last weakness. In 2020 Tesla secured the rights to mine lithium in Nevada, where there is plenty of the stuff. This gives them the option to become their own lithium supplier, yet again avoiding the bottleneck and allowing them to make their battery packs far cheaper than any competitor as they can effectivley buy lithium at cost rather than market price. This will also lower the carbon footprint it takes to make a Tesla, as shipping raw materials, including lithium, makes up most of their footprint.

So by changing their batteries’ chemical makeup and having the option to enter the lithium mining game, Tesla could become the only EV manufacturer able to scale up to meet demand, without massively increasing their prices. What’s more, this also means that their battery could become one of the most eco-friendly on the market.

It is easy to see how this gives Tesla the advantage and leaves the rest of the market for dead. Even if their cars don’t evolve or improve over the next few decades, the simple fact they will be able to produce the millions of vehicles needed at a sensible cost, will put them leagues ahead of any other manufacturer.

This is why Elon should be considered a genius. He doesn’t focus on the next five years. He is thinking of the next 20 years and is happy to sacrifice now to grow later. He is like a business Batman, always prepared and ready for what is to come. That is why SpaceX and Tesla have risen to fame and why no other business comes close. The only question is ‘how dominant will Tesla become?’