Raymond Verhelst & Associates

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For much of the media, there is a lack of knowledge behind the battery industry, so the assumption is to lead the story with Tesla Cars. To set the record straight, Tesla is not planning to move their car man-ufacturing facility to McCarran, Nevada. They have a well-established, state-of-the-art manufacturing and assembly facility in Fremont, California which has ample room to move forward with their next generation Model 3, as well as the expanded demand for the Model S.

 

Tesla in Nevada is all about the batteries. To be specific, lithium ion rechargeable batteries. Mr. Musk’s plans call for con-structing the single largest cell man-ufacturing facility in the world, and he isn’t going at it alone.  With the support of a key industry leader behind the actual 18650 cell assembly line, Japan’s Panasonic Corporation, the multi-billion dollar com-mitments to construct the cell assembly lines ensure the overall quality behind the product.

 

The 5-minute expert piece published in your Sunday publication on September 14th promoted the common misconception about Lithium-ion batteries, giving the local community an improper view or should I say, vision.

 

For a quick history lesson, the rechargeable Lithium platform was actually developed in the United States. The initial technology milestones came from combined academic and private industry research back in the late 1970’s through the early 1990’s. Mr. Stanley Wittingham while at Exxon (now Binghamton University) has been credited as one of the founders of the lithium technology. Collective research from Germany, England, Canada and domestic labs in Texas, New York and Pennsylvania all contributed, but ultimately the US government (and private industry) deemed the technology to be too volatile and too expensive so they abandoned it.

 

The Japanese electronics industry, sup-ported by the government, invested in continuing research which subsequently led to SONY delivering the first commercial Lithium battery in 1991, followed by Panasonic and Sanyo.

 

Since this first launch, globalized man-ufacturing took over to where the Japanese outsourced to South Korea, who in turn outsourced to China. Names like Samsung, LG, BYD, BAK and hundreds of smaller players have joined Panasonic and SONY in building the rechargeable lithium-ion battery industry into what has been projected by industry reports to be worth more than $37 billion annually by 2018. To date, 99.9% of all Lithium ion cells are produced in Asia and Japan is recognized as the leading quality supplier of cells and manufacturing equipment.

 

Let’s put some scale to the Tesla facility. The combined 5 million square feet is equal to 87+ football fields under one roof. The current Tesla Model S uses seven thousand individual 18650 cylindrical cells integrated into the car’s power sled chassis. These individual cells are grouped into battery packs and a sophisticated Battery Man-agement System circuit board controls each cell within these packs. When linked to each other, the total capacity is 85kWh of stored energy power. Because the cells generate their own heat, Tesla has actually integrated a fluid coolant system that helps to control the temperature and the lifecycle of the cells.

 

When you look at projections for 2018, at 500,000 vehicles, assuming a similar battery pack, an estimated 3,500,000,000 cells will be produced annually. This is just one type of cell. The Tesla facility, with this capacity will supplant the combined output of a majority of all the Asian cell producers as if they were under one roof. 

 

What most don’t know is that Lithium-ion rechargeable technology continues to go through massive research and devel-opment that has resulted in more than forty different commercial variations of size, capacity, operating temperature, chemistry makeup, shapes and commercial imple-mentation. While Tesla has modified the chemistry and quality of materials used in their cells, the cylindrical cell is actually one of the older formats. Tesla has chosen the most common platform to deliver per-formance, consistency and safety. Yet having said this, Panasonic will not just make cells for Tesla cars.

 

Mr. Musk’s development team has indicated that they plan on dedicating 15% of the output to be used in large energy storage. It is important to note here that while much of the hype has surrounded the Tesla car, Mr. Musk also owns a majority of the stock behind Solar City.  To this end, Mr. Musk recently announced his commitment to con-structing the largest North American solar panel manufacturing center to be based in Buffalo, New York. This facility is projected to produce 1 gigawatt of solar power annually within two years.

 

While we can debate whatever rebate incentives were offered to put a Solar Panel manufacturing facility in such a high tax state and a city that averages less than 50 days of clear sunshine annually, but that is a subject for another day. The reality is that the Solar City presence here in Southern Nevada (which is significant), as well as the battery factory, will be busy making Musk battery packs that will collect and store electricity created by these Musk panels in residential and commercial markets throughout North America.

 

In addressing the 5-minute expert point about cost, we need to get a little technical. There are two types of batteries, regardless of the chemistry. There are “Primary” cells which are similar to the cells in your flash-light or smoke alarm. These are single charge cells that are disposed of (or hopefully recycled) at the end of their life.

 

Then we have rechargeable “secondary” batteries. The lead acid battery in your vehicle, the battery pack in your laptop, the flat cell in your phone, tablet or GPS device are all rechargeable. This means that you have batteries that will accept a certain number of recharges in their life cycle. There are a number of different types of chemistries that make up the many batteries we use. Nickel Cadmium (NiCd) and Nickel-Metal Hydride (NiMH) are two of the most common examples a majority of consumer electronics users would know of. In most cases these types of cells deliver power that as it is delivered, slowly diminishes in per-formance. Lithium ion and Lithium polymer are rapidly taking over the rechargeable segment.

The price comparison used in the example was against single use primary cells at retail pricing. In reality, rechargeable 3.7v 2800ma 18650 cells in minimum order quantities of five thousand run around $1.50 each, and each of these can be recharged hundreds, if not thousands of times.

 

In terms of safety, there is a real mis-conception about the volatility of Lithium-ion Batteries and what the public needs to know is that actual Lithium-ion cells are dumb storage devices that need a sophisticated electronic battery management circuitry to control overcharge, over discharge, cell balancing, operating temperatures, and a dozen other features to make the total solution safe. Lithium-ion battery formats are often confused as there are individual cells in addition to multiple cells that when linked together form a pack. Tesla is a perfect example of a massive inventory of cells configured into a single, sophisticated battery pack.

 

The challenge is that often the horror stories we hear about with battery fires and explo-sions, have to do with the cell’s management controls, or the cells are of lower grade with subtle manufacturing defects internally. The old adage states “you get what you pay for” and considering batteries are typically one of the most expensive single components within an electronic device, you can be sure that manufacturers weigh cost when delivering a finished product.

 

In my own extensive involvement in the global Lithium Battery Industry, I have witnessed fully charge Lithium Polymer cells that have been beaten with a hammer, poked with nails, shot with a gun and actually cut in half to where the cell did not explode and continued to discharge power through the tabs.

 

The goal behind the development of Lithium ion batteries is to deliver a consistent higher level of power output for the longest period before running out. This means that your phone, or other device will perform exactly as it was intended right up to the point when it runs out of power. In general, Lithium batteries when compared to older technology have the ability to store higher volumes of energy (density) and the cell is typically smaller in size, lighter in weight and can be produced in a number of different shapes to accommodate product design and form factor.

 

What few people know is that the overall lifecycle of a typical Lithium rechargeable cell may be thousands of recharge cycles over a number of years, and in fact at the end of the specific use life such as a Tesla car, this cell has used only the top 20% of the battery’s capacity. To better understand, this is the top range where the cell can deliver the high power discharge ((known as a high C-rate, where C is the capacity of the cell if dis-charged completely in one hour), in reality the cell is not totally spent. In fact, these cells at the 80% capacity could be removed and used again for a number of additional years in slow, constant power charge and dis-charge needs like solar and compact wind storage, LED commercial and street lighting.

 

If you connect the dots, looking at the Tesla infrastructure, you will realize that by extend-ing the unlimited mileage warranty on all Tesla cars to eight years (as they have done), owners will be able to replace battery packs five years or under warranty and give Tesla a significant source for secondary use market for these replaced cells into the Solar City model. This basically allows Tesla to sell the batteries twice.

 

Hypothetically add in a Lithium battery recycling process (yes they can be recycled), and Tesla can actually own the entire circle of life!