Big automakers as well as start-ups are unbundling Tesla’s value chain and creating competitive technologies at every point. Can Musk hold out?
Leading global automakers, from Volkswagen to General Motors, are getting into Lithium mining, as the competition for EVs (electric vehicles) heats up. A clutch of start-ups are unbundling Tesla’s battery value chain and creating competitive technologies at every point, which they are offering to either sell themselves or partner with incumbents. Start-ups are coming up with analytics driven charging models, using artificial intelligence to slash waste during battery manufacture, or reconfiguring the supply chain by recycling batteries.
Over the next two years, rivals including General Motors, Ford, Mercedes-Benz, Hyundai and VW will launch scores of new electric vehicles, from a Chevrolet priced below $30,000 to luxury sedans and SUVs that top $100,000.Tesla was the No. 1 EV maker worldwide in 2022, but China’s BYD and others are closing the gap fast, according to a Reuters analysis of global and regional EV sales data.Though Tesla continues to enjoy key competitive advantages of a super-efficient cost structure from its highly automated factories, and continuous drive to lower its battery costs, the competitive landscape in EVs is undergoing a dramatic shift.
Competitors unbundling battery tech
Tesla has worked for years to vertically integrate its EV battery business, but new players are emerging to capture EV battery tech market share. From novel materials development to battery recycling and everything in between. Competitors are targeting three segments – battery management systems, battery lifecycle & battery materials.
As electric vehicle (EV) adoption becomes more mainstream, start-ups– with backing from legacy auto OEMs, among other players – have popped up to compete with Tesla on battery tech. Ford, General Motors, and Volkswagen have staked the success of their electrification roadmaps on these start-ups– from battery materials start-ups aiming to disrupt Tesla’s lithium-ion battery tech, to grid software companies that provide new EV charging solutions like vehicle-to-grid tech, to battery recycling companies that could transform the battery production process.
Using AI to cutbattery manufacturing waste
The EV battery industry, initial battery production results in plenty of scrap before producers optimise manufacturing processes to avoid waste. Tesla’s Nevada battery Gigafactory scrapped around half a million batteries a day in 2019. Start-ups using new hardware sensors, AI-driven software analytics, detect manufacturing defects and help prevent scrap losses later down the production line have sprung up.
On the software front, companies use AI algorithms to detect defects in the production process as well as predict the future performance of batteries, allowing battery manufacturers to test and optimise new battery designs. This can help battery producers quickly find and address production issues, speeding up the production ramping process and reducing waste. Start-ups offering these software solutions include Zitara, Voltiq, and Accure.
Analytics-driven optimal charging model
Tesla’s latest EV fast-charging sites, the V3 Superchargers, are capable of intelligent charging, which involves automatically adjusting the charging rate of an EV battery to prevent battery degradation and preserve battery life while charging as quickly as possible.Start-ups are using different AI model inputs to determine optimal charging patterns. Qnovo, for instance, uses weather conditions to adjust charging speeds and allows battery producers to offer longer battery warranties. Iontra collects batteries from its customers, cycles and analyses the batteries, and then generates a tailored charging model for each customer based on the battery analysis.
Power flowing through an EV goes through plenty of changes depending on where the power is going. For instance, the battery pack outputs high-voltage direct current (DC) power, while sensors and the vehicle entertainment system use low-voltage DC power. Power electronics convert between different forms of power.
Tesla invested heavily in power electronics while developing its Model 3 EV to make these devices as small and efficient as possible. In 2018, Tesla was the first company to embrace silicon carbide (SiC) transistors over conventional silicon transistors due to lower power loss and SiC transistors’ smaller size (leaving more room for batteries).
Start-ups improving transistors to make battery
Start-ups are improving on SiC transistors to make battery charging more efficient and decrease the size of onboard electronics equipment. For example, Flex Power Control offers SiC power electronics for fast DC charging, as well as home power electronics solutions that allow EVs to charge from residential solar or backup battery systems. While Flex Power Control uses multiple power electronics to convert power between devices like solar panels and an EV, power electronics start-up Czar Power is looking to reduce these to one single system. This decreases the cost needed for the power electronics while also making the system more energy-efficient.
Supply chain for battery recycling partnerships
EV batteries are built using an extraordinary number of raw materials, and global supply chain disruptions have driven the price of these materials to record levels. As a result, EV battery costs are predicted to break a decade-long trend of cost declines in 2022 and instead slightly increase, according to research from Bloomberg New Energy Finance.
Redwood Materials has announced battery recycling partnerships with major auto OEMs like Ford, Volvo, Toyota, and Volkswagen.Start-ups are also automating the battery recycling process. Posh Robotics is looking to streamline the recycling process by relying on robots and automation rather than manually sorting through battery waste.
A Tesla Master Plan without New Models
Tesla watchers are confident that the maverick techno-king of Tesla, Elon Musk is aware of these challenges and has a strategy to counter those, at the same time they are worried that Twitter is proving to be a major distraction even for someone with the energy pack of Elon. A week or so ago, Musk revealed the third part of Tesla’s “Master Plan,” in which the company will lead the global effort to eliminate fossil fuels and convert the world to sustainable energy. Tesla projects it will take $10 trillion in investments to bring about this sustainable future powered by renewable energy.
A big part of achieving that vision, according to him, involves expanding the world’s energy storage capacity by up to 240TWh. During the course of the event, Tesla executives said this can be accomplished without having to mine a significant volume of ore. Musk claimed that it would only need less than 30 percent of all nickel in the Earth. Nevertheless, he did not reveal any new model.
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