BATTERY DAY SUMMARY AND EFFECT ON INDIAN MARKET

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bhanu

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BATTERY DAY SUMMARY AND EFFECT ON INDIAN MARKET
« on: October 16, 2020, 05:48:08 AM »
Hi,

I am summarizing all my takeaways from battery day event. Initially, I am summarizing all the important notes, figures, and analogies used in the battery day event. I won't be commenting on them because I think these decisions are from best engineers of the world, but at the end I will present my opinion on "It's probable effect on Indian market in-terms of manufacturers/startups, battery swapping ecosystem and LFP Market" and also sometimes may supplement some information or reference image ppt page in brackets. I will highly appreciate discussion on these points as well as awareness of any mistake that might have popped in. I have attached battery day's event ppt for reference.

Points from annual shareholder meeting and Battery Day Event:

President of the company briefed on mission as well as other points and reinforced the emphasis of company in supply chain reduction of cobalt. After that musk took on the stage with annual shareholder briefings. He told how simplified value chain, reduced sales, advertising, and unnecessary cost has led to development of most efficient, lowest cost solar in U.S. at $1.49/W for solar on existing roofs. Company is right now providing both retrofit as well as solar glass roof, but long-term vision of the company is with solar glass roof (although hard product). Following will be the focus of Tesla :

  • Improving economies of scale to increase affordability
  • Supply chain tightening for faster car deliveries and reduced logistics cost to generate cash flow for capex to develop world's best technologies (one factory per continent)
  • Rapid improvement of autonomy in vehicles as massive value addition for future cars
  • Safety at the core of the design (In fact, one of the reason why tesla produces safest American cars, because other car manufacturers have not touched safety much and were doing things in standardized manner, Tesla broke the roles and worked on safety from clean slate and started from ground up like it did in other places)
  • Average autopilot collisions is 0.3 million/miles way less than average collisions of 2.1 million/miles in U.S. and it's improving (Musk told about refined autopilot software which is now 4D i.e. it uses time stamp along with 3D sensing capabilities)
  • Software development not only for vehicles but for smart factories (Musk said that difficulty of machine that makes the machine is vastly greater, 10-100 times harder)
  • Solar will be a major part of Tesla (Musk emphasized that for transition to sustainable future -> energy storage, electric vehicles and sustainable energy generation should go hand in hand with affordability at their core which can only happen while building Giga-factories faster and with far less investment)
 
Goal One : 20 TWh/year sustained Battery production for 15 to 25 years to transition to sustainable future (10 TWh for electric vehicles and 10 TWh for energy storage)(This number will grow as world economy matures)(At this goal only, 100x growth is needed in batteries)(Since, energy storage is long-term asset it can do with 10 TWh/year of energy production otherwise would have been needed more)

Average vehicle age = 15 years
Total Battery needed for transition of global fleet to electric = 15 years*10 TWh = 150 TWh

Investment in materials, cells and battery technology needed = $2 Trillion (Thus, they are rethinking dramatically to cut this cost down, to make the goal feasible)
Total People Estimated = 2.8 Million

Goal One Problem : Todayís Battery Factories Cannot Scale Fast Enough
Thus, scalable cell manufacturing is needed.

Goal Two: More Affordable Cells

Goal Two Problem: EV Market Share Is Growing But EVs Still Arenít Accessible To All
Cost/KWh curve is not improving fast enough, it's flattening, thus slowing down rate of affordability of cars (Page 11 & 12 of PPT)

Tesla designed vehicles and batteries from ground up, now it will design cells too (Goosebumps moment:), we don't need lazy, complacent age-old manufacturers)

Goal : To half the battery cost/KWh

For this, improvement is done in these five areas:
  • Cell Design
  • Cell Factory
  • Anode Materials
  • Cathode Materials
  • Cell Vehicle Integration

1. Cell Design/Form Factor

Transition from 1865 type in 2008 to 2170 type in 2017 led to 50% increase in energy density (Musk, changed 18650 to 1865 because he said nobody could explain him why extra zero was there. Another, testament of the fact most people unlike musk follow things blindly until a revolutionary like him leads the way). THEY KICKED THE EXTRA ZERO!!

Bigger Cylindrical Cells Cost Less until a sweet spot where no further trade-offs with vehicle range is made. (Page 24,25,26 of PPT)
Sweet Spot = 46 mm diameter
But why isn't everybody doing?
because then, thermal issues and issues with supercharging crop-up

So, they destroyed the root cause, took tab out of picture. The TABLESS ARCHITECTURE. It removes thermal problem from the equation and allows to go to absolute lowest cost form factor as well as simpler manufacturing process. (Page 27 & 28 of PPT)

THEY DECIDED TO KICK THE INTERMEDIATE(TABS)!!

TABLESS ADVANTAGES:
  • Absolute lowest cost form factor
  • Simpler manufacturing (Since, otherwise cell had to keep stopping in the manufacturing system where all the tabs were. This will lead to CONTINUOUS MOTION PRODUCTION, reduced manufacturing error as well as increased cell active area. This also, dramatically simplifies winding and coating in cylindrical cells)
  • Fewer Parts (Cuts down cost (cell cost as well as manufacturing cost) and simplifies manufacturing)
  • 5x Reduction in Electrical Path (from 250 mm to 50 mm, leading to thermal as well as performance benefits)
They took the existing foils, laser powdered them and enabled dozens of connections into the active material through the shingled spiral (mystery behind musk's t-shirt:) ).

Interestingly, power to weight ratio is better in bigger tabless cells than smaller tab cells.
Thus, introduced 4680 cells with:
  • 5 Times more energy
  • 16% additional range
  • 6 Times more power
Just from this innovation alone. More to come.

Just Form Factor/Cell Design Change = 14% $/KWh Reduction

2. Cell Factory

Their team used inspiration from paper and bottle industry to make each and every process fundamentally better and scalable for low-cost mass production. (Page 30 & 31 of PPT)

Innovation 1: Dry Process Coating
In the conventional system (wet process), first process is powders are mixed with either a water or a solvent (solvents for cathode). The second and third process is coat and dry where it goes into large coat and dry oven where the slurry is coated onto the foil. Huge ovens (tens of meters long) dry it. And then in, solvent recovery process, the solvent is recovered which was went into the exhaust lines during heating. In last process, coated foil is compressed to the required density and thickness. (Page 32 of PPT)

THEY DECIDED TO KICK THE INTERMEDIATE STEPS!!

In dry process, instead of using wet slurry and then drying it, they directly put the dry powder onto the film. Instead of four processes there are now only two processes, first one is mixing and second one is dry coat. (Page 33, 34 of PPT)

Impact:
  • 10 Times Footprint Reduction
  • 10 Times Energy Reduction
  • Massive Investment Reduction (Towards the goal of making factories scalable)
Why others are unable to do?
Because, it requires very complicated machinery. They are working on lot of machine revisions (3-4 per month) to make it fit for volume production. (Page 35 of PPT)

Innovation 2: Assembly Process Improvement (HIGH SPEED CONTINUOUS MOTION ASSEMBLY)(Page 36 of PPT)
Here, musk used analogy of highway or city-driving. Current, manufacturing processes are like city-driving where there are multiple stops, but they want to make it like super-fast highways. Their dedicated team for internal design of machines works relentlessly to make machines with fastest parts per minute. Also, most of the factories have 2-3% of their occupied volume doing useful work. They want to increase it by 10 times to make it 30% (or more) useful work/m3. Result : Factories can be 10 Times Smaller (saving huge capex and making them scalable)

Impact:
  • 7 Times Line Output (Effort Multiplier)
  • 1 Assembly Line = 20 GWh Output
Tesla's Focus :
  • Increasing speed of manufacturing lines
  • Increasing density of manufacturing lines
Thus, trying to achieve what 5 to 10 conventional factories would normally be required to achieve. 1 Tesla Factory = 5 - 10 Conventional Factories
Also, they have tried to keep no edge condition between one piece of equipment and another piece of equipment in their factories. Thus, designing entire machine to be one machine and removing all the unnecessary steps. Clearly, they are aiming to be best at manufacturing in whole planet like any other thing.

Innovation 2: Formation
It consists of charging, discharging and verifying the quality of cells and is typically 25% of the total investment. Traditionally, it's done individually for each cell but through use of sophisticated electronics and principals from battery management system they can achieve this at higher speed and lesser costs.

Impact:
  • 86% lesser formation investment
  • 75% lesser formation footprint

Factory Improvements Impact:
  • 75% lesser investment per GWh (For 150 GWh Factory)
  • 10x smaller footprint per GWh (For 1 TWh Factory)
 
Effectively, it also means that per GWh space requirement will be less for 1 TWh factory than for 150 GWh factory

Tesla's Internal Cell Production Goals:
  • 100 GWh by 2022
  • 3 TWh by 2030
It is worth noting that this is supplemental to what is bought from suppliers. This will enable to reduce weighted average cost and increase production for lot more cars and stationary storage. But, this can only be obtained by reducing capex required for plants through technology.

Just Form Factor/Cell Design Change = 18% $/KWh Reduction
Total Cost Reduction Till Now = 32% $/KWh Reduction

3. Anode Materials

Graphite is most commonly used anode structure. But, Silicon is abundant, inexpensive and awesome. Most abundant in earth's crust after oxygen (Basically, itís sand). It stores 9 times more lithium than graphite.

Why everybody is not using it?
Challenge with silicon is that of volume expansion. It expands 4 Times when fully charged with lithium and basically all of that expansion stress on the particle to particle to start cracking and electrically isolating to lose the capacity. Thus, battery loses it's capacity. It also gums up with passivation layer that has to keep re-forming as the particles expand. Musk used analogy of "Cookie crumbles and gets gooey". (Page 42 of PPT)

Existing Approach:  Highly engineered expensive materials just like in model-3 which don't enable all of the benefits of silicon and are not scalable enough. (Page 43 of PPT)
Silicon Structured in SIO Glass => 6.6$/KWh
Silicon Structured in Graphite => 10.2$/KWh
Silicon Nanowires => More than 100$/KWh

THEY AGAIN KICKED THE INTERMEDIATES(Graphite, SIO Glass, .....)!!

Proposing:
Tesla Silicon => 1.2$/KWh

How they are doing it?
They took the raw metallurgical silicon rather than engineering the base metal, stabilized the surface through elastic, ion-conducting polymer coating (applied through very scalable approach i.e. no chemical vapor deposition, no highly engineered solutions,..) which is integrated in the electrode through a robust network formed out of a highly elastic binder. (Page 44 of PPT)

Just leveraging Silicon's potential = Additional 20% increase in range 

Just Form Anode Material Change = 5% $/KWh Reduction
Total Cost Reduction Till Now = 37% $/KWh Reduction
 
4. Cathode Materials

Here, for cathode materials they used analogy of Bookshelf, where lithium-ions are books and metal oxide is shelf. The thing that sets apart all the different cathode materials are that how many books (lithium-ions) they can fit in their shelves (metal oxides) sturdily, i.e. it is in shape as books (lithium-ions) move back and forth. Capacity and Retention of the structure is important, otherwise will lose cycle life and battery capacity drops very quickly.

Now, there is a graph on page 46 of slides which compares energy density of different materials (bookshelves) with their prices (from London metal exchange). From that, it is clearly visible that nickel is cheap and has high energy density whereas cobalt is expensive and has lesser energy density. Iron is cheapest but has least energy density. (That's why LFP has low energy density). Thus, nickel is the most desirable element.

Then, why cobalt is being used?
Turns out that bookshelf of only nickel is weak and thus needs cobalt to stabilize the bookshelf. 

THEY AGAIN KICKED THE INTERMEDIATE(COBALT)!!
 
TESLA'S APPROACH:HIGH NICKEL CATHODE DEVELOPMENT
They leveraged the novel coatings and dopants to maximize nickel and completely remove cobalt to get 15% reduction in cathode's $/KWh

DIVERSIFIED CATHODE APPROACH:(Page 48 of PPT)
So that not to be totally constrained by nickel availability in order to scale, they are going for three tiered approach to batteries as follows (In terms of availability of nickel and cobalt, both are less as compared to worldwide numbers in United States. Cobalt is about 0.79% of total reserves in US and nickel is about 0.12% of total reserves in US. But, cobalt is being demanded by telecom industry too for it's requirement in rollout of 5G technology):

IRON BASED: Long Cycle life, Medium Range (Energy Storage Products, affordable mass market EVs)
NICKEL+MANGANESE BASED: Medium Plus Range (Premium Range EVs)
HIGH NICKEL: Long Range (Mass/Range Sensitive EVs like semi-truck, cybertruck)

Basically, high energy density is directly proportional to range thus, high nickel content leads to high range. Also, Elon cleared one misconception around iron based batteries, that on materials level iron has almost twice the energy density than nickel but on battery pack level, taking everything into account nickel is just 50-60% better than iron (Basically, iron based batteries are not that worse and good for options where energy density is not paramount). Nickel manganese which is used for intermediate range applications is relatively straightforward i.e. to do a cathode that's 2/3rd nickel and 1/3rd manganese which would allow them to make 50% more cell volume with same amount of nickel. It's also not much trade-off if we compare to 100% nickel applications which is required in very high energy density applications like semi-truck or cybertruck.
 
CATHODE COST BREAKDOWN:
  • Nickel = 35%
  • Lithium = 25%
  • Cobalt = 5%
  • Processing = 35% (THEIR BIG TARGET)

TRADITIONAL CATHODE PROCESS:

Step - 1: Metal Sulfate Production
Metal from mine is changed into an intermediate thing called metal sulphate (Why? Because metal sulfate was wanted by chemists a long time ago. It's a legacy thing i.e. things which are done in the same way without questioning)

Step - 2: Raw Materials Input
More chemicals and whole bunch of water

Step - 3: Cathode Production
Lot of stuff happening here

Step - 4: Final Product
Little bit of cathode and whole bunch of wastewater and by-products

THEY KICKED THE INTERMEDIATE METAL!!

TESLA CATHODE:

Step - 1: Raw Materials Input
Step - 2: Cathode Production
Step - 3: Final Product

Additionally, no waste water at all, all of the water is recirculated. (Page 50,51 of PPT)

Impact:
  • 66% Lesser Investment
  • 76% Lesser Process Cost
  • 0 Waste Water
A truly, scalable solution. Eliminates, billions in battery grade nickel intermediate process.
Also, directly consuming nickel powder simplifies metal refining and recycling. So, it's advantages are:
  • Sustainably mined/sourced ores
  • Optimized Refining
  • Recycled Batteries (since, same process can also be used to directly consume the metal powder coming out of recycled electric vehicles and grid storage batteries)
TESLA LITHIUM PRODUCTION:
The way lithium ends up in cell is through cathode, so on-site lithium conversion. Also, pioneering a new process that's a SULFATE FREE PROCESS.
KICK THE INTERMEDIATE(SULFATE) !!
A sulfate free process and 100% electric facility co-located with cathode plant leads to 33% reduction in lithium-cost.(Page 54, 55 of PPT)

HOW WILL THEY DO IT?
Instead of doing just the way it's done, they found they can actually use table salt (NaCl) to extract lithium from the ore and then put rest of the dirt back where it was. A very sustainable way of obtaining lithium(all the elements are reusable in this acid-free, saline extraction). Also, lithium is abundantly available (one of the most common element on earth), not like oil. They acquired site in NEVADA for lithium production. There is enough lithium just in NEVADA to electrify the entire U.S. fleet.

Turns out, Recycling elements from cells is far more desirable than from raw ones WHY?:

Nickel:
  • Percentage from typical ores = 1.2%
  • Percentage recycled from recycled cells = 20%
Lithium:
  • Percentage from typical ores = 0.7%
  • Percentage recycled from recycled cells = 2.7%
Cobalt:
  • Percentage from typical ores = 0.2%
  • Percentage recycled from recycled cells = 2%
On getting to steady state 20 TWh/year of production, they will transfer to existing fleet to recycle to make new batteries rather than mining. Also, tesla recycles 100% of their vehicle batteries. They are starting pilot full-scale recycling production at gigafactory to continue to develop the recycling process which is today done by 3rd parties, since they believe that they can do it more effectively because making the same battery as recycling (Tesla co-founder and ex-CTO J.B. Straubel probably won't be happy by this announcement:)). This is for long-term vision of the company since batteries will take around 10 years or more to be ready for recycling (Page 58 of PPT). (I am totally amazed by the long-term thinking capability of elon musk, even during financial crisis in 2008 when his companies were close to death, he never halted the long-term futuristic projects of his companies)

Just Form Cathode Material Change = 12% $/KWh Reduction
Total Cost Reduction Till Now = 49% $/KWh Reduction (Almost there at goal of 50% but there's more to come)
 
CONTINUED IN NEXT POST.......

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bhanu

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Re: BATTERY DAY SUMMARY AND EFFECT ON INDIAN MARKET
« Reply #1 on: October 16, 2020, 05:50:44 AM »
CONTINUED FROM ABOVE POST......

5. Cell Vehicle Integration

They wanted an architecture for Tesla for long time which will be the future in almost all the electric cars which is Single Piece Casting for Front and Rear Body. For this, they have commissioned largest casting machine in the Fremont factory which will perform High Pressure Die-Cast Aluminum. But, in order to do this, had to develop their own aluminum alloy because wanted a high strength casting alloy that did not require coatings or heat treatment which is a breakthrough for castings. Because, in a large casting, if you heat treat, it afterwards tends to deform and becomes very difficult to keep in shape. GIGA CASTING INNOVATION (Page 61 of PPT). Tesla team is working on lot of ADVANCED MATERIALS AND ALLOYS that have never existed before

WHAT IS THE BENEFIT OF SINGLE PIECE CAST FRONT AND REAR BODY?
It interfaces to STRUCTURAL BATTERY where battery for the first time will have dual use i.e. use as an energy device and as a structure

AIRCRAFT ANALOGY: In early days of aircraft, they would carry the fuel tank as a cargo which were quite difficult to carry (worse than a cargo, since has to bolt them down) . Then, they made wing as fuel tank in wing shape, thus no longer cargo. STRUCTURAL FUEL TANKS improve mass and range and became fundamental to the structure of the aircraft. They, are doing same for the cars, which will have quite profound impact.(Page 62,63,64 of PPT)

KICK THE INTERMEDIATE STRUCTURES!!

IMPACT:
  • Negative mass of non-cell portion of battery: Now, in this case battery doesn't need intermediate structures like supports, stabilizers, stringers, structural elements which not only eliminate weight of these non-cell elements of the battery but structural support from the battery further reduces mass from the chassis leading to negative mass of non-cell portion of the battery.
  • Increase in Packing Density of Cells : Since, there is no intermediate structure, batteries have lot more space and thus can be packed more densely. Also, instead of using a filler that is flame retardant they will be using a filler that is flame retardant as well as structural adhesive which affectively glues the cell to top and bottom sheet allowing the shear transfer.
  • Increase in Shear Force Transfer
  • Increase in Stiffness: Just like a formula one craft or racing boat which have carbon fiber sheets with aluminum honeycomb between them for incredible stiffness. Thus, this is even better than what aircraft can do because in that fuel is liquid which can't be used as structure between sheets for incredible stiffness and shear force transfer. This is such a profound effect that a convertible without upper structure and this configuration has more stiffness than a regular car without this configuration.
  • Improves mass efficiency of the battery
  • Improves volumetric efficiency of the battery
  • Improved Safety During Side Impact: Since, cells are closer to the center, side impact has to penetrate deeper in order to harm the cells which effectively improves the safety of the car.
  • Decreased Polar Moment of Inertia: It is the similar effect that we roll on skates faster when we have hands in rather than hands out, i.e. distributed mass takes more torque to turn around an axis. When, batteries come closer to the center it decreases polar moment of inertia for better handling. (Even, in case of other electric cars of tesla, they are much better in handling than their gasoline counterparts, since gasoline cars have distributed mass like engine in the front whereas tesla cars had batteries underfloor which reduced polar moment of inertia. Also, due to the same reason racing cars have most of the weight around the center, since they need much better handling).
STILL, WHAT IS THE USE OF CASTINGS?
The reason, castings are quite important because they want to transfer load into the structural battery pack in a very smooth continuous way so arbitrary point loads are not transferred to the battery so as to feather the load out from the front and rear into the structural battery. These castings also allows to move the cells closer to the center of the car improving safety, mass/volumetric efficiency of battery, polar moment of inertia and stiffness.

Impact:
  • 10% Mass Reduction
  • 14% Range Increase Opportunity
  • Improves Structural Performance of the vehicle
  • 370 Fewer Parts (Massive Simplification in factory)
  • 55% Reduction in Investment per GWh
  • 35% Reduction in Floorspace
Just Form Cathode Material Change = 7% $/KWh Reduction
Total Cost Reduction Till Now = 56% $/KWh Reduction

Stacking up the benefits of Tesla's Vertical Integration:
  • Range increase for vehicles / energy density for energy products: 54%
    • Cell Vehicle Integration : 14%
    • Cathode Material : 4%
    • Anode Material : 20%
    • Cell Design : 16%
  • $/KWh Reduction: 56%
    • Cell Vehicle Integration : 7%
    • Cathode Material : 12%
    • Anode Material : 5%
    • Cell Factory : 18%
    • Cell Design : 14%
  • Investment/GWh Reduction: 69%
    • Cell Vehicle Integration : 8%
    • Cathode Material : 16%
    • Anode Material : 4%
    • Cell Factory : 34%
    • Cell Design : 7%
Musk, also pointed out to the Tesla's much better trajectory in cell cost and importance of collective efforts of everyone in the supply chain to accelerate world's transition to sustainable energy, since EV < 1% of global fleet and Stationary Storage < 0.1%. (Page 68, 69 of PPT)

LONG-TERM VISION: Electric Vehicle Powertrain that costs less than combustion engine for a compelling affordable $25,000 car which is fully autonomous and has great performance and range. Thus, even more affordable and powerful and better than IC engine cars. (Page 71, 72 of PPT)

Points from Q&A:
  • Tesla is working on smart home HVAC system which can communicate with a car i.e. if about to reach home, will communicate to home to maintain temperature and vice-versa.
  • Massively increasing the amount of stationary storage (which requires massive amount of batteries) is critical because renewable energy is intermittent (both solar and wind are not available 24x7)(This is even more important in country like India where supply through renewable energy can only give good wheel to well efficiency due to poor power plants efficiency and distribution losses and EVs doesn't solve any other cause than reducing import bill and local pollution but not overall pollution. Renewable Micro-grid with EVs is a good solution for India).
  • Question of Prosperity OR Sustainability? Musk explains that advent of affordable $25k will dramatically lower total cost of ownership due to reduced upfront cost, maintenance cost and running cost and this makes lot of sense in lease/subscription/EMI model. Also, reducing cost of solar and wind may lead to reduced cost of energy. So, it's PROSPERITY AND SUSTAINABILITY.
  • All modes of transportation to be electric except rockets. For rockets, will be using wind power for liquid oxygen.
  • Patents of Tesla are freely available.
  • Musk's LFP Takeaways : While there is some limitations on total amount of Nickel produced every year, there's really no limit on Iron. So, thus LFP is scalable as compared to nickel. Extending range of iron based vehicles will be key part of roadmap going forward.
  • Turner's takeaways on powertrain efficiency: EV's are all about efficiency and thus increase in powertrain efficiency is really needed so that everyone can have that diversified cathode approach where LFP can be used in medium range. Basically, a strategic vehicle integration will do the job.
  • They are incentivizing miners to ramp-up production.
  • Productivity and entertainment will be two important areas in the era of autonomous cars since, then car will be your chauffeur and we will be no longer occupied in driving the car.
  • Vehicle To Grid Integration : It only makes sense if you have frequent power cut-offs (or very cheap EV charging cost otherwise backflow of energy will lead to more losses and battery degaradation). Its also needs whole separate system(hardware & software) to cut-off power to the grid and all connectors doesn't actually support it. It's better to have power wall and car separate. Power wall works with solar, 24x7 connected and is own utility (with long-life low vibration resistant battery). Nobody even used in Roadster.
Conclusion: Seems like history is going to repeat, what Steve jobs did to phone industry, musk may do to automobile industry. When iPhone (Tesla) was launched other companies mocked for around 1 year before starting to compete which lead to untimely death of conventional leaders like Nokia,HTC,Blackberry (conventional car makers). Even after having product in their hands they were not able to compete due to end-to-end integration leading to competitive advantage and awesome products. Same is happening with tesla, going towards end-to-end integration of hardware,software,materials,cells which will build a massive competitive moat. Tim cook tightened the supply chain to further reduce cost to make apple's desirable products more affordable which is exactly what is happening with Tesla. They are inventing the future of autonomous, connected and electric cars. Also, with iPhone, one tends to buy other apple products like apple watch, earpods,itunes, icloud... etc. such that each works perfectly in sync with each other. Same is happening with Tesla, along with tesla one may bring solar installation product of tesla, powerwall,..... And conventional industry wants to play it safe just like nokia, htc,... to wait and watch it to happen. Also, seems like MUSK attacks every INTERMEDIATE thing whether it was tabs, intermediate manufacturing step, intermediates in materials, intermediate structures or for that matter even intermediate employees. There was also, bit of apprehension on Tesla's capability to innovate after J.B. Straubel stepped down but they have proved wrong.

Also, Elon Musk is making a technological step change which is backed by economic viability i.e. law of physics backed by law of economics. I think intersection of physics and economics is sweet spot for advancement of human race (maybe that's why Mr. Musk has a degree in physics as well as economics). Moore's law backed the success of Apple II which revolutionized the industry, so law of physics which was advent of technology and law of economics which was reduction in transistor prices lead to the breakthrough. Had it been launched 10 years before, it may not have been so successful. Same happened with cloud computing industry, where economics of reducing cost of computing and advent of better internet technology led to a disruption. Same, happened with advent of smartphones where apple leveraged reducing touchscreens cost, improving batteries, transistors and developed technology for a disruption. And these sweet spots come once, till they become falling wave when lot of players enter. I think, sweet spot for EV has come which is being rightly leveraged by TESLA.

CONTINUED IN NEXT POST......

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bhanu

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Re: BATTERY DAY SUMMARY AND EFFECT ON INDIAN MARKET
« Reply #2 on: October 16, 2020, 05:52:56 AM »
CONTINUED FROM ABOVE POST......

Effect on Indian market:

  • LFP Cells: Indian market is flooded with LFP as well as NMC chemistry cells. NMC is considered a good choice for two wheeler industry which needs high energy density due to small storage capacity and LFP is considered a good choice for three wheelers since they have huge space in chassis for batteries, so energy density is not a issue. Now, the issue is warranty offered is very low due to fear of replacement costs by OEM. They hardly offer 1.5 years of warranty on NMC (lead acid offers 6 months to 12 months at 25-40% cost with recycling options). LFP has higher warranty but doesn't gives required range/energy density. Also, LFP is considered inferior quality and act of dumping by china (since, they have more sales of NMC and they can't let go of LFP investments, a typical Lithium-ion manufacturing plant is huge chemical plant with minimum capex of around $136mn/Rs. 1000 Cr). Now, Tesla's announcements can lead to perception shift for LFP chemistry that it can too deliver good range with high warranty which is very much desirable in India.

  • Startups/Manufacturing: Turner's point was worth noting that EV's need highly efficient powertrain systems (it increases the range of the vehicle by using lesser energy). Not, only efficient powertrain systems but efficient BMS/Electronics and software. As sandy munro briefed, that the reason why Tesla was being able to pull up with NCA cells with so much safety issues was that it developed in-house BMS and electronics as well as whole battery pack engineering. Electronics and software has obviously a paramount role in Electric Vehicles. In a analysis by Frost & Sullivan early this year, Indian electric vehicle value chain is expected to reach $4.8 Billion by 2025 out of which 30% i.e. $1.47 bn is expected to be for power electronics (other categories were electric motor, cells, charging station). In case of cells, it's difficult to compete with Chinese, Koreans and Japanese since cells cost are about economies of scale which require huge capex and suitable infrastructure. Both, of which are absent in India (we were never good in manufacturing), so it's hard to compete with them. Similarly, I think in motors and charging stations. But, power electronics and EV software industry requires less capex and infrastructure, which is more human capital infrastructure (which is widely available in India). So, I think power electronics, BMS, TMS, Software can be a good opportunity for India. (for example, like ion energy has been able to deliver it's Edison analytics AI tool and BMS to many partners). I have attached images of Frost & Sullivan analysis.

    Another thing, I want to share is my perception that there is lack of a good EV startup in India. Means, just compare the mission statements of startups of US and India's. Musk says their first mission is acceleration towards sustainability and then profitability, and they will do anything for it. In India, one of the Best EV startup, Ather Energy's CEO in an interview says that first it's profitability/business, and then if it makes sustainability, it's addition. Their is fundamental difference in intentions. Our another good EV startup is a spin-off of a large cab aggregator company (I mean one gets sick, if you see there Battery swapping pilots, it's "Jugaad Engineering", I have covered more about it in battery swapping paragraph below). Or one more leading EV battery company, is more into assembling cells rather than developing something new. They are more influenced by law of economics than law of physics. There are almost no technology agnostic/sustainability focused leaders in India's ecosystem ready to take on the challenge of sustainability (If we go by present rate, we will lose one-third of our Himalayas by 2100 and will face 2.8% dent on GDP due to reduced crop yields, and unestimated human/financial loss due to numerous disasters as well as air-quality). While, there are some startups which are very good in law of physics i.e. working on really step change technologies like graphene batteries or aluminum fuel cells or solar electric cars but the question lies that can we achieve economies of scale needed to popularize the technology or fight with Industry giants or can they make through legal changes required for new technology (It's hell lot of work and time  to get through any legal change here). Economies of scale in manufacturing is like network effects in software, it builds a massive competitive moat. There is also fundamental difference in startups in north and south India. Bengaluru startups are very technology agnostic whose innovations doesn't necessarily work in north India. For example, GMW motors (a Bengaluru based e-rickshaw startup) has engineered an excellent e-rickshaw and is quite successful in many markets but it has low probability of success in city like Delhi which is the biggest market of this segment. North India is in more need of EV adoption as compared to South India, especially due to severe air quality and also this region has little innovation going on relevant to this market.

    Also, even if Tesla successfully launches $25,000 mass affordable car (Rs. 19 lakh, is not mass-affordable in India) and is able to convert most of the global fleet into EV, it will be difficult to do in India due to fundamental difference in nature of market. For example, most of the time Market cap valuation of Maruti Suzuki is greater than it's parent (Suzuki Corporation), i.e. the company which performed average globally is massive success in India. And one will notice other many examples where brands performed exceptionally abroad but failed here. Also, the features of autonomous won't be much use here (5G infrastructure will take time). So, I think Tesla won't be able to fulfill the needs of a mass market Indian vehicle. Thus, India needs a good EV startup (like TESLA) which is at intersection of law of physics and law of economics to really accelerate the transition to sustainability (because new adoptions are primarily due to industry not government, government is just a catalyst) before it's too late. Also, India has a good opportunity to serve other markets in power electronics/BMS/TMS and software.

  • Battery Swapping Ecosystem: Battery swapping is one area where lot of startups in India are working like ola electric, sun-mobility, greenfuel/charge-up, mobylitics,...... for 2 wheeler as well as 3 wheeler. From what I know, the most successful pilot of battery swapping was done by Fortum (Finnish company) in collaburation with clean motion (Swedish company) for zbee in DLF Mall of India, Noida around 2 years back. They even started a project called "Unnati", to scale it. But, unfortunately they closed it. They were earning revenue, operations were smooth, technology was smooth,......then what happened? Early, this year I met with Vice President of Fortum India in a forum and asked him the same question and he told the reason they stopped the project is due to rapidly changing battery technology. And they were afraid that if they pumped in huge investment, will the rapid change in technology outdate their swapping stations network? (maybe the same reason why all the cash-loaded logistics giants in India like amazon, flipkart don't invest in capex for these technologies rather use them on lease). If we go back in history and trace the reason for first Macintosh failure, a similar reason can be found. According to John Sculley, then CEO of Apple (the one who ousted Steve jobs), by the time mac was launched it's computing capabilities were toyed due to advent of faster computing capabilities (again due to Mooreís law). So, making swapping stations all across but 2-3 years later realizing that battery technology has caught up for fast charging such that there's no need for extra investment on extra batteries (battery swapping needs extra batteries) will place a company in a tight situation (I hope I am wrong because India's electric man Chetan maini's sun-mobility is aggressively working on it, although their pilot with SmartE failed). Tesla's accelerated advents in battery technologies poses further questions on battery swapping technology. But, again most of the Indian startups are focusing on law of economics (and putting crappy shoe rack style swapping stations) without considering technological step change just like Better Place (rose close $1Bn funding), Solyndra, Fisker,... did and met the same fate.
I tried to summarize battery day event and share some of my views on Indian market with respect to the event. I am always looking forward to connect with like minded people. Let's Connect, drop me a mail @ bhanumarwaha24@gmail.com.

THANKS!!

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Jaideep

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Re: BATTERY DAY SUMMARY AND EFFECT ON INDIAN MARKET
« Reply #3 on: October 21, 2020, 11:48:47 PM »
Thanks for Sharing!

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charrin5

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Re: BATTERY DAY SUMMARY AND EFFECT ON INDIAN MARKET
« Reply #4 on: March 08, 2021, 02:12:12 AM »
Wow What a Nice explanation thnx for sharing.....very helpful materials for me

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charrin5

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Re: BATTERY DAY SUMMARY AND EFFECT ON INDIAN MARKET
« Reply #5 on: March 30, 2021, 01:30:58 AM »
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