Tesla said to be readying new long-lasting, low-cost batteries to put EVs at price parity with gas cars

Darrell Etherington
BRUSSELS, BELGIUM - JANUARY 13: Electric motor on a Tesla Model X full electric car chassis demonstration model on display at Brussels Expo on January 13, 2017 in Brussels, Belgium. The platform is fitted with the electric motors for the rear and front wheels and shows the empty space in the middle where the battery packs are fitted on the production models. (Photo by Sjoerd van der Wal/Getty Images)

Tesla CEO Elon Musk has been touting forthcoming battery technology improvements, going so far as to dub a forthcoming company talk "battery day" in prior public comments. Now Reuters is reporting that the automaker plans to unveil new advanced battery technology it has developed that can produce power sources for its EVs which last for "millions of miles" and can be produced at low costs -- allowing the automaker to sell cars at or below the market cost of equivalent gas-guzzling internal combustion cars.

This would be a watershed moment for Tesla, if true. Reuters reports that the development is the result of joint R&D work conducted with China-based Contemporary Amperex Technology, and that it is based on work done by a team of crack Tesla battery technology researchers coming from an academic background that were enlisted by Musk specifically to change the economics of electric power storage.

Battery capacity and production costs has long been a limiting factor in terms of the manufacturing costs of electric vehicles, and is one big reason EVs carry a price premium when sold to customers. Ordinarily, automakers, including Tesla, point to lifetime fuel savings and tax incentives provided by local, state and federal governments as mitigating factors that mean the lifetime cost of an EV is equal to or less than that of a gas car, but if Tesla's new battery tech can change the dynamics so that the price on the sticker is also lower than a gas vehicle, that would be a significant driver of broader EV adoption.

Tesla will first launch the new battery in China, Reuters says, beginning with the Model 3. It then plans to roll it out to other vehicles and markets, and ultimately produce batteries with new manufacturing processes that are meant to bring down labor costs while raising output volume, at so-called "terafactories" that would span up to 30 times the space of the current Tesla Gigafactories, including the one in Nevada.

The battery tech that Tesla is working on will include low-cobalt and cobalt-free versions of chemicals used, as well as newly developed materials and internal coatings to reduce the stress upon the active components and prolong their useful life, per Reuters. Simultaneously, it'll also introduce a new system developed by its partner Contemporary Amperex Technology that removes the step of having to bundle cells prior to their installation in final battery packs, which will bring down battery pack unit weight and costs. It's also developing new recycling technologies for the components in its batteries so that its vehicle power sources can eventually be used across its other energy products to extend their useful life.