Tesla Releases New Technologies on Battery Day, Will Benefit Chinese Industrial Chain Firms

Tesla Releases New Technologies on Battery Day, Will Benefit Chinese Industrial Chain Firms

(Yicai Global) Sept. 23 -- Tesla held a Battery Day event at its California plant yesterday and released new battery technologies able to reduce costs and raise efficiency. Chinese supply chain companies are expected to benefit from these technologies, securities analysts said.

The new Tabless battery cells, which Tesla calls 4680 cells, will generate a 14 percent reduction in cost per kilowatt-hour and a 16 percent increase in range, five times more energy capacity and six times more power. Tesla omitted the tab, a flap on the battery that connects the cell and the vehicle it powers, to attain these gains. The company also plans to primarily use cheaper nickel instead of cobalt in the long run to cut the price in half.

These changes will enable Tesla to develop a USD25,000 electric car within three years, the US new energy vehicle maker's Chief Executive Elon Musk said.

Battery technologies Tesla released for the occasion are future directions that are currently limited by their revolutionary nature, Changjiang Securities stated. The firm unveiled these technologies earlier, it noted, adding Chinese companies are also exploring them, but hitting on how to industrialize them is the key.

The Silicon Valley-based EV maker has been advancing battery technologies to reduce costs and increase efficiency, and the supply chain is expected to benefit from these technologies, CITIC Securities said in a research report. China's lithium battery raw material and equipment suppliers have the strongest competitiveness worldwide and are expected to become direct Tesla suppliers. Further reducing costs and raising production of Tesla's vehicles is good for the firm's supply chain, such as traditional parts, thermal management and automotive electronics.

Tesla is expected to advance battery technology and reduce costs and thus advance the popularity of electric vehicles and accelerate the transformation of the automotive and energy industries. Leading firms in China's EV supply chain and lithium battery industry are globally competitive and are thus poised to reap the benefits of global EV sales growth, CITIC Securities said.