“Why Tesla is still the greatest car builder of the 21st century”
No more bidding wars are at stake between General Motors and Tesla for ventilators. Nikola, a hydrogen car/truck builder and Tesla competitor from the Valley has alleged fraud allegations. The state of California has announced the reduction of emissions by 33% of individual households by 2025. The cradle was thus smoothly paved for Elon’s highly anticipated ‘Battery Day’ on the 22nd of September. It was the summum for Robinhood traders to speculate during Elon’s livestream. After the presentations, the stock slid 5% in spite of some interesting announcements. The remarkable negative reaction of the market could be explained by a “buy the rumor, sell the news” reaction. Battery day was anticipated over and over again. With no immediate impact on fundamentals, it’s possible that the traders which anticipated the event were selling into it. Nevertheless, Matthieu Meeus (a computer engineering graduate from Harvard University and Tesla intern) and myself (a neutral Elon fanboy), followed the livestream critically and noted a few of the most interesting moments of the day, pondering on some remarkable engineering achievements.
Autonomous Vehicle Technology
L: At best, two main forces will drive Tesla’s performance in the next three years and will be the holy grail for EV-manufacturers overall → driving down the cost/kWh of the battery packs while increasing the energy density of the battery cell. At the benchmark value of $100 dollar/kWh, EV-vehicles will be able to be competitive with combustion engine cars. Right now, the cylindrical battery sits on a cost of $156/kWh after all benefits of vertically integrating the battery. However, is the announcement of a fully autonomous vehicle in three years realistic?
M: In the space of autonomous driving, I feel that Tesla’s Autopilot is really leading the way. In order to train the deep neural networks to an adequate accuracy, every autonomous driving software developer just needs one thing: data, and as much as possible. I believe that no other competitor possesses a data source equivalent to Tesla’s own car fleet. Furthermore, they are the only ones that have Autopilot currently deployed in a large amount of cars all over the world. This allows them to efficiently iterate through new software versions. With the technology becoming increasingly impressive, I have the feeling that the toughest upcoming challenges will be coming from non-technical sides. Within the company, Autopilot is still spoken of as an assistant driving tool, where it’s still always recommended for the physical driver to keep their attention on the road. I feel that this exposes the challenges that we’re still facing when it comes to legal issues or social acceptance, before any form of full autonomy can be deployed on the road.
Smart energy
L: As for the battery, a larger format was announced (4680 meaning 46 mm in diameter and 80 mm height) which should deliver 5x more power and 6x more energy compared to the previous 2170 format. Logically the power increases fivefold when the volume of the battery increases 5.5x but a new coiled design shortens the minimal path length an electron has to travel and therefore the larger design is able to increase the range by 16%. Did you work on any of the infrastructure changes coming with the new battery during your project?
M: During the three months of my internship, I was part of Tesla’s ‘Energy Optimization Team’. That’s a group of 10–15 software engineers and data scientists that writes smart software to optimize battery charge/discharge strategies. For Tesla battery products such as the residential Powerwall or Megapack and Gigapack, this comes down to implementing predictive models for solar energy, electricity price and demand and computing the optimal strategy based on these predictions. I actively contributed to the general code base in general, but had two specific projects as well, one about evaluating a new forecasting strategy and one about a parallelized simulator to track the performance of the battery structure.
Still safe?
L: Within the structure (a cylindrical cell), the stack is still anode / separator / cathode using the known Li-ion technology. The anode material is a graphite sheet impregnated with a metallurgical processed silicon. The lower the silicon content, the more stable the material is during charging/discharging cycles. A new silicon process was able to add 20 % to the power density of the battery. Additionally, the cathode material is nickel-aluminum-manganese-cobalt (so-called NMC battery) where the Chinese manufacturer CATL has increased presence of nickel powder adding another 4 % to the energy density → more nickel also means higher probability of catching fire, therefore it will only be tested on Cybertrucks. How safe are the newly trained algorithms when again a new software update will happen inside Tesla’s vehicles?
M: I’m sure they would only deploy a certain update as soon as they are confident about its safety. Of course, as they still recommend the driver to keep their hands on the steering wheel and their eyes on the road, this ensures that even the rare bugs or mistakes do not result in any disaster. I feel that all users should still understand that it’s not perfect and while enjoying its amazing capability, they should still use it responsibly. In addition, in three years, the cathode material should be completely cobalt free and replaced by a new lithium phosphate structure. At last, 4 modules consisting of 700–1000 cells are bolted to the front and back of each model to reduce torsional stiffness. All increments summed up give a range increase of 54% and reduction of 56% on the cost/kWh (see figure). Remarkable improvements in such a short time.
L: Last question. According to his biography, Elon does all the hiring of engineers himself. Did he interview you?
M: It’s still the tradition that ‘Elon personally approves every hire’, but I’ve heard this is not in person anymore. It’s mostly him scanning your profile and saying it’s ok. And as this only counts for full-time hires and not for interns, I didn’t go through this process.
L: Thank you Matthieu, in any case I’ll hold on to my amount of musk/share…
See you next week,
Laurent
PS: Amazon seems to have reacted to the huge opportunity described in my first letter. It is trying to disrupt the choppy and non-consumer-friendly healthcare (or more specifically healthtech) industry by launching its Amazon Halo product, directly competing with Fitbit and other wearables.
