[Battery Day] Tesla Declares 'Energy Independence'... No New Technology Threatening K-Battery

[Asia Economy Reporters Park Soyeon and Kwon Jaehee] Regarding the 'Battery Day' event held by U.S. electric vehicle company Tesla on the 22nd (local time), the domestic secondary battery industry evaluated that although productivity improvement plans such as 'Terafactory' and 'half-price battery' were unveiled, there were no revolutionary new technologies that could surpass 'K-battery.' This is because Tesla did not announce a concrete roadmap for all-solid-state batteries or batteries with a driving range of 1 million miles (1.56 million km), which the industry had anticipated ahead of Battery Day. However, attention was drawn to Tesla's plan to reduce prices and improve driving range through technologies that can be realized within a few years, such as improving existing technologies like cell design, process improvements, and battery material technology development, as well as explosively increasing production scale.

◇ Quantum leap with 'Tera'... 'Game changer' Tesla reshapes the battery market landscape = Among the announcements made at Tesla's Battery Day held at the Fremont factory in California, the part that the domestic battery industry paid the most attention to was the Terafactory construction plan. Tesla announced plans to establish production facilities with a capacity of 100 GWh by 2022 and 3 TWh by 2030. This is a declaration to raise the battery power unit from the current GW to TW, aiming to revolutionize electric vehicle battery production volume and efficiency. 1 TW corresponds to 1,000 times the current production unit of 1 GW used by battery companies. The combined production capacity of the three domestic battery companies?LG Chem, SK Innovation, and Samsung SDI?is only 120 GWh.

An industry insider said, "Tesla talking about 'Tera' is pure fear for existing companies," adding, "It is a shocking 'energy independence declaration' that completely overturns the battery industry landscape."

The roadmap to reduce battery costs by 56% within the next three years also attracted attention from the domestic battery industry. Musk promised to produce batteries at half the current price and make affordable cars that anyone can buy. To achieve this, Tesla plans to lower battery production costs through innovations in battery design and factory processes. This will be accomplished through silicon anode materials, cathode materials and process improvements, and battery process integration. With the improved batteries, Tesla expects a 54% improvement in driving range. Tesla unveiled the 4689 battery, which is larger than the existing 2170 battery in terms of cell design. They also revealed plans to develop batteries using 100% nickel cathode materials.

Park Yeonju, an analyst at Mirae Asset Daewoo, said, "Since Tesla is focusing on improving the productivity of existing battery processes rather than presenting new battery technologies, much of it seems highly feasible," and added, "Given the nature of improving existing technologies, leading battery and automobile companies are also expected to pursue similar technology development."

Terafactory construction by 2022
Focus on feasible technological improvements
Increase in electric vehicles with battery internalization

◇ Tesla's energy independence declaration... Crisis for K-mobility = Although no concrete roadmap was presented on this day, Tesla's battery internalization is not a story of the distant future. Tesla is currently conducting pilot production of batteries and plans to directly produce 10 GWh of batteries at the Fremont pilot factory within the next year. At this Battery Day, Tesla proposed improving the productivity of existing battery processes rather than unveiling completely new technologies. This approach is highly feasible and could be threatening as it takes market share from existing battery companies.

An industry insider said, "If Tesla resolves its biggest weaknesses?battery supply volume and price?it will rapidly increase its electric vehicle market share and gain complete market leadership, which is not good for our companies," adding, "The energy dominance war stemming from electric vehicles and EV batteries will escalate into a large-scale economic war reminiscent of a 'national war.'"

◇ K-mobility companies also fight for leadership in the 'future mobility' war = K-mobility companies are also putting their lives on the line to secure energy dominance through aggressive production capacity expansion and technology development. LG Chem, which had a battery production scale of only 6 GWh in 2017, plans to secure a production scale of 100 GWh by the end of this year. Samsung SDI and SK Innovation plan to secure 100 GWh of battery production capacity by 2025. LG Chem is developing NCMA (Nickel-Cobalt-Manganese-Aluminum) material technology targeting mass production in 2021. This technology is characterized by increasing nickel content to 85-90% and reducing cobalt content from the existing 10-20% level to below 5%. Samsung SDI is focusing all efforts on advancing the commercialization timeline (2027) of the all-solid-state battery, known as the 'dream battery.' SK Innovation is also joining the technology competition at a remarkable pace. SK Innovation developed the world's first battery applying NCM811 cathode material with nickel, cobalt, and manganese ratios of 80%, 10%, and 10%, respectively, in 2016 and began mass production in 2018. Last year, it also succeeded in developing the world's first battery adopting NCM 9½½ cathode material and is preparing for mass production. An industry insider said, "There were many speculations about the Battery Day event, but no complete next-generation technology was revealed," adding, "However, since the content could bring price innovation in existing technologies, our companies plan to actively prepare for it."