Read this transcript of 15 minutes from the Tesla AGM. What a great corporate event, promotion-wise. They have some important things for us to hear about mining.
When we take that anode cost reduction, we're looking at another 5% reduction in dollar per kilo kilowatt hour costs at the battery pack level. But wait, there's more.
Let's talk about cathodes. What is a battery cathode cathodes are like bookshelves where the metal -- the nickel, cobalt, manganese, or aluminum is like the shelf and the lithium is the book. Really what sets apart these different metals is how many books of lithium they can fit on the shelves and how sturdy the shelves are.
It's tough to figure out what the right analogy is to explain cathode and anode, but a bookshelf is probably a pretty good one. You need a stable structure to contain the ions. You want a structure that does not crumble or get gooey. Basically, something that holds its shape in both the cathode and the anode. As you're moving these ions back and forth, it needs to retain it's structure. If it doesn't retain a structure then you lose cycle life and your battery capacity drops very quickly.
People are always talking about what the cathode is going to be but the thing to consider is what the metals are capable of and that's what we have on this chart here -- dollar per kilowatt hour cost of the metal in the cathode using LME London Metal Exchange prices versus the energy density of just the cathode. You can see nickel is the cheapest and the highest energy density. That's why increasing nickel is a goal of ours and everybody's in the battery industry.
One of the reasons why cobalt has even used it all is because it is a very stable bookshelf. The challenge with going to pure nickel is stabilizing that bookshelf with only nickel and that's what we've been working on with our high-nickel cathode development, which has zero cobalt in it. We are leveraging novel coatings and dopants. We can get a 15% reduction in cathode dollar per kilowatt hour.
It's a big deal.
It's not just about nickel.
In order to scale, we really need to make sure that we're not constrained by total nickel availability. I actually spoke with the CEOs of the biggest mining companies in the world and said please make more nickel, it's very important. I think they are going to make more nickel, but I think we need to have a three-tiered approach to batteries. Starting with iron that's kind of like a medium-range. Then, nickel-manganese as sort of a medium-plus to intermediate range. And then high-nickel for long-range applications like cyber truck and the semi.
For something like a semi truck, it's extremely important to have high energy density in order to get long-range. Just to give iron a bit more time - if you look at the cathode level for iron, it looks like nickel is twice as good. But when you fully consider it at the pack level with everything else taken into account, nickel is maybe 50 or 60 percent better than iron. Iron is a little better than it would seem when you look at it at the cathode level versus the battery pack.
Iron is actually pretty good for stationary storage and for medium-range applications where energy density is not paramount.
Like I said for intermediate-range, it's a nickel-manganese mix. And it's relatively straightforward to do a cathode of this nickel-manganese. It's two-thirds nickel and one-third manganese. This would then allow us to make 50 more cell volume with the same amount of nickel.
And with very little energy trade-off. Just enough to have you still want to use 100% nickel for something like a semi-truck, but really not much of a sacrifice.
What is beyond the metals? People spend a lot of time talking about the metals, but the cathode process itself is a big part of the cost. 35% of the cost for cathode dollar per kilowatt hour is just in transferring it into its final form. We see that as a big target and we decided to take that on.
Here's a view of the traditional cathode process. Effectively, if you start at the left and have the metal from the mine then the first thing that happens is the metal from the mine is changed into an intermediate thing called a metal sulfate. That just happened to be what chemists wanted a long time ago. Then, when you're making the cathode you have to take this intermediate thing called metal sulfate and add chemicals -- add a whole bunch of water. A whole bunch of stuff happens in the middle and at the end you get that little bit of cathode. Plus a whole bunch of wastewater and byproducts.
It's insanely complicated. If you look at a small world journey of a nickel atom, "What happens to me?" It's crazy. It's like you're going around the world three times. It's like digging a ditch, filling the ditch in, and digging the ditch again. It's total madness, basically. Today, these are legacy things that show how it was done before. They were able to connect the dots, but really didn't think of the whole thing from like a first principle standpoint. Saying, how do we get from the nickel ore in the ground to the finished nickel product for a battery? We've looked at the entire value chain and said, how can we make this as simple as possible? That's what we're proposing here with our process. As you can see, a whole lot less is going on here. We recirculate the water. There is no waste water at all.
When you summarize all of that, it is a 66% reduction in capex investment and a 76% reduction in process cost. And zero wastewater. It is a much more scalable solution.
Then, when you think about the fact that now we're actually just directly consuming the raw metal nickel powder it dramatically simplifies the metal refining part of the whole process. We can eliminate billions in battery-grade nickel intermediate production. We can also use that same process we showed on the previous page to directly consume the metal powder coming out of recycled electric vehicle and grid storage batteries. This process enables both simpler mining and simpler recycling.
Now that we have this process, we're going to start building our own cathode facility in North America and leveraging all of the North American resources that exist for nickel and lithium. Just by localizing our cathode supply chain and production, we can reduce miles-traveled by all the materials that end up in the cathode by 80%, which is huge for costs.
To be clear, cathode production would be part of the Tesla cell production plant. Basically, raw materials come in from the mine and out comes a battery.
The way the lithium ends up in the cell is through the cathode, so we should obviously on-site lithium conversion as well. We will do that using a new process that we're going to pioneer, which is a sulfate-free process. Again, skip the intermediate. Yields 33% reduction in lithium cost 100% electric facility co-located with the cathode plant.
It's important to note that there is a massive amount of lithium on earth. Lithium is not like oil. There's a massive amount of it pretty much everywhere. In fact, there's enough lithium in the United States to convert the entire United States fleet to electric. All the cars in the United States could be converted to electric using only lithium that is discovered in the US today.
That's just what we already know is here.
What is the smartest way to the ore and extract the lithium and do so in an environmentally friendly way? Looking at first principles physics standpoint, we actually discovered something different from the way it has always been done. We found that we can actually use table salt, sodium chloride, to basically extract the lithium from the ore. Nobody's done this before, to the best of our knowledge. Nobody's done this, but all the elements are reusable. It's a very sustainable way of obtaining lithium. We actually got rights to a lithium clay deposit in Nevada over 10,000 acres.
The nature of the mining here is also very environmentally sensitive.
We take a chunk of dirt out of the ground, remove the lithium, and then put the chunk of dirt back where it was. It will look pretty much the same as before. Simply mix clay with salt, put it in water -- salt comes out with the lithium. Done! It's pretty crazy.
We're really excited about this and there is enough lithium in Nevada alone to electrify the entire US fleet. It's one of the most common elements on the planet. Eventually, as we said at the beginning, when we get to this steady-state 20 terawatt hours per year of production, we will transfer the entire non-renewable fleet of both power plants, home heating and batteries, industry heating and vehicles to electric -- at that point, we have an awesome resource in those batteries to recycle to make new batteries. We don't need to do any more mining at that point.
You can see why the difference in the value of the material coming back from the vehicle versus the ground. You'd always go to the vehicle, so we recycle 100% of our vehicle batteries today and are starting our pilot full-scale recycling production at Gigafactory Reno next quarter. To continue to develop this process as our recycling returns growth.
To date, it's been done by third parties but we think we can recycle the batteries more effectively. Especially since we are making the same battery as the thing we're recycling. Whereas, third-party recyclers have to consider batteries of all kinds.
And just to think about what this actually means -- the recycling resource is always 10 or greater years delayed because batteries last a really long time. But, eventually, all resources will be made available and that's why we're investing in this recycling facility in Nevada.
Long-term, new batteries will come from old batteries once the fleet reaches steady state.
We just talked about scaling cathode and recycling -- all of the benefits that you just saw are added to this of a benefit of a 12% reduction in dollars per kilowatt hour at the battery pack level. Almost at our halve-the-cost goal, but there's one more section.
There's an architecture that we've been wanted to do with Tesla for a long time and we finally figured it out. I think it's the way that all electric cars in the future will ultimately. It's the right thing to do.
It starts with having a single piece casting for the front body and the rear body. In order to do this, we commissioned the largest casting machine that has ever been made. It's currently working just over the road at uh Fremont plant. It's pretty sweet.