Elon Musk: Tesla Terawatt Tale

Elon Musk mentioned plans to expand annual Tesla battery production to 1 or 2 terawatt-hours. This bit of the presentation was ignored by nearly all media coverage, but it represents yet another example of bold thinking in Musk’s companies.

Responding to a retail investor question about the upcoming battery and powertrain investor presentation, Musk said:

For battery day, we’re going to do a comprehensive review of cell chemistry module and pack architecture. And a manufacturing plan that has a clear roadmap to a terawatt hour per year. The time for this is probably is about six months like maybe February or March next year. Show and tell.

Tesla investor call, roughly 25 minutes in https://edge.media-server.com/mmc/p/ao8x4poq

Later in the call responding to a question about battery sourcing, Musk went a bit further:

To some degree Battery Day will be kind of like a Master Plan Part 3 … How do we get from kind of in the tens of gigawatt hours per year to multiple terawatt hours per year. … That’s a pretty giant scale increase, increase of sort of roughly 100. Like if we’re at … 30 to 35 [gigawatt-hours] or something like that. And how do we get to like 2 terawatt hours a year? Which is like two orders of magnitude increase.

In order to really make a fundamental shift in the world’s energy usage and really transform things to a sustainable energy future, if you’re not in the terawatt-hour range … it’s a nice news story, but it’s not fundamentally changing the energy equation.

Roughly 49 minutes into the call

Even for those who closely follow Tesla, this is an audacious idea, simply stunning.

Tesla is planning not just to double or triple its battery production, and not just increase it by a ten times, but they’re aiming to produce more than 50 times as much battery storage, presumably in a short time frame.

Total global production capacity of these kind of batteries is less than 300 gigawatt-hours per year. It is growing fast already with projections that it may increase to a terawatt-hour a year by sometime in 2023 or 2024. Tesla appears to be shooting to produce double that much fairly soon.

A terawatt-hour is 1000 gigawatt-hours. A gigawatt-hour is 1000 megawatt-hours. A megawatt-hour is 1000 kilowatt-hours (kWh). The Tesla Model S 100D has a battery capacity of 100 kWh, while the standard range Model 3 has 50 kWh. So a terawatt-hour would be enough for 10 million high-end Model S cars or 20 million Model 3 cars a year.

Recently Tesla acquired a battery company called Maxwell Technologies. Their “dry cell chemistry” approach may allow Tesla to both reduce the cost per kWh of battery production, increase production volume, and increase energy density. In other words they would be making more batteries which hold more charge, and it would cost less to do so.

There has been a lot of talk in the media about Tesla facing increased competition from traditional carmakers offering new electric vehicles. This misses one of the biggest challenges those carmakers face – getting adequate batteries at a reasonable cost.

This also ignores a large second purpose Tesla has for its battery production – energy storage. Tesla is not just a car company. They sell Powerwall for homes and Powerpack for companies and utilities.

The Powerwall 2 stores 13.5 kWh. Powerpack 2 stores 210 kWh.

Projects like the Hornsdale battery will become easier and cheaper to build, making them even more profitable.

Update: Musk responded to a tweet about this.

Fitting with the comments in this article before he said that, an important purpose of producing terawatt-hours worth of batteries is for stationary storage like Powerwall and Powerpack installations.

So while Wall Street analysts focus on quarterly numbers, long term investors see huge growth for Tesla in the not too distant future in both cars and energy, along with positive environmental change for the world.

*Warren Redlich is the admin of an Elon Musk fan club group on Facebook and is long Tesla.

Author: Warren Redlich

Warren Redlich is a real estate agent and an attorney. He focuses on selling homes in West Boca Raton. Call or text Warren at 561-536-3645. Warren is also a tech YouTuber covering Tesla, SpaceX and more. His YouTube channel is https://www.youtube.com/c/WarrenRedlich/ and he sells Elon Musk related t-shirts and other merchadise at https://ElonBits.com. Warren also publishes videos about politics at https://warrenredlich.locals.com/