What Tesla’s Battery Day might reveal: Project Roadrunner, Model S…

Tesla investors and fans are eagerly awaiting what CEO Elon Musk has described as “one of the most exciting days in Tesla’s history.” The “Battery Day” event and shareholder meeting on Tuesday, Sept. 22 is expected to showcase Tesla’s next-generation battery technology, including batteries that store more power, but cost less to make.

“There’s one single focus in this,” says Gene Berdichevsky. “What reduces my dollars per kilowatt-hour [of battery storage] at the vehicle level?”

Berdichevsky, now CEO of battery materials company Sila Nanotechnologies, was Tesla’s seventh employee, and worked on battery design for the original Tesla Roadster. He and others believe the innovations Tesla is likely to unveil Tuesday, the fruit of years of acquisitions and in-house research, could add up to a long-term strategic advantage over competitors nipping at the trailblazer’s heels.

Project Roadrunner

For many years, Tesla CEO Elon Musk touted his commitment to “the machine that builds the machine”: aggressive automation in pursuit of big cost advantages. Tesla’s struggles with the Model 3 were a setback to that thesis, but Tesla has forged ahead with streamlining battery production under the code name Project Roadrunner, and the potential benefits are huge.

Project Roadrunner appears to involve many different advances, but a lot of attention has been paid to contributions by Maxwell Technologies, which Tesla acquired in 2019. Maxwell developed a so-called dry electrode process for battery cell production, which replaces solvent-based “wet” assembly processes, and has a plethora of potential benefits.

First, the dry electrode could slash production costs by eliminating the time- and space-intensive drying stage required with solvent-based electrode application methods. Some experts have speculated that the relatively small footprint of Tesla’s pilot battery-cell production line in Fremont, Calif., may reflect that change.

Experts also say the dry electrode process would improve battery performance, particularly charging speeds, by forming a stronger connection between elements of a battery cell. One battery industry executive, however, cautions that this process might not be deployed in the near term, describing it as next-generation technology.

Tesla also appears likely to announce a shift to what’s known as cell-to-pack production. Currently, battery cells are first assembled into “modules,” arm-length boxes that are in turn put together into car-sized battery packs. The nominal point of the modules is to make it easier to replace defective cells, but Musk early this year declared that Tesla no longer needs modules, and eliminating the intermediate step should reduce both costs and vehicle weight.

A million miles and running

Analysts have speculated about a laundry list of other innovations that could be part of Battery Day. Those include tabless electrodes, which could increase charging speeds and storage capacity while, again, reducing cost. There has also been much speculation about a “million-mile battery” capable of being recharged many more times than current models without degrading. That technology may be more expensive than what’s currently used, though, so it remains uncertain how it would fit into Tesla’s overall strategy.

Tesla could also highlight the growing range of battery chemistries it uses in different products. For instance, Tesla appears to be preparing to use heavier, shorter-range lithium-iron batteries in cheaper Chinese vehicles, freeing up more expensive materials for high-performance products like the Tesla Semi. Though it’s more of a long shot, Battery Day could include details about Tesla’s battery recycling, possibly involving Redwood Materials, a battery-recycling startup founded by former Tesla CTO JB Straubel.

There may be some non-battery announcements during Battery Day. Musk has hinted at unveiling ultra-high-performance “Plaid” versions of the Model S and Model X. There might be details about progress at new factories in Austin and Berlin. And Tesla could also announce long-anticipated body, drivetrain, or interior updates to Models S and X, which might help those high-margin vehicles regain lost ground against luxury competitors.

Digging an insurmountable moat?

Tesla’s battery improvements are part of a broader strategic push to break free from third-party battery suppliers—a shift some saw hints of in last year’s freeze on investment in the joint Panasonic-Tesla Gigafactory in Nevada. Batteries are key to an electric vehicle’s performance, and are estimated to make up as much as half of EV costs, so producing lower-cost, higher-performance batteries in-house would mean a major edge on competitors.

Tesla investor and analyst Matt Joyce believes the move is particularly crucial for Tesla right now, as a wave of both established vehicle makers and new startups prepare to battle for EV market share. Many of those competitors will be reliant on third-party battery suppliers such as LG and Samsung, limiting their ability to innovate, and even constraining their battery supplies. If Tesla can escape those constraints, Joyce says, “nobody’s going to be able to catch up.”

Tesla’s push for battery efficiency also has stakes beyond mere competition. Conventional wisdom in the EV industry has it that a battery pack costing $100 per kilowatt-hour of storage would make it possible to sell EVs for about the same price as gasoline-burning cars. Because EVs already cost less to fuel and maintain than gas-burners, this could trigger a broad and rapid transition to EVs.

It’s not certain that Tesla will reveal any detailed cost information on Tuesday. But if it does announce it has cracked the $100/kwh battery pack, using technology it owns, it would draw a clear path to long-term market dominance—and could trigger another major surge of speculative enthusiasm for the company’s already frothy stock.

Tesla is welcoming in-person visitors to its Fremont factory on Battery Day, apparently hoping to show off its new manufacturing process and other big reveals in person. Much of the event will also be streamed online, though, starting at 1:30 p.m. PT on Sept. 22.