EV and battery wars grow despite lagging buyer interest

Tesla's Cybertruck sells for $40,000 and will deliver in late 2021. The company already commands 80% of the electric vehicle market in the U.S., but much of the future for EVs depends on battery technology and production. (Tesla)


Major companies are waging war over production of electric vehicles, with battery cell innovations at the very heart of the competition.

General Motors revved up the electric vehicle war at CES 2021 last week with a detailed description of its Ultium battery system that it expects to use in 30 new EVs through 2025.

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On Monday, EV pioneer Elon Musk tweeted on this essential question: “Battery cell production is the fundamental rate-limiter slowing down a sustainable energy future. Very important problem.”   He retweeted a Tesla job listing for engineers to “come work on cell/battery production at Giga Texas & Giga Berlin.”

Whether or not GM is a true contender to Tesla in EV production, a war is in the works over attracting battery cell engineering talent and innovation that will influence EV adoption and growth.  In addition to vehicle manufacturing prowess and the ability of automakers to market EVs to a somewhat reluctant public, the future of EVs will largely depend on the efficiency and cost of EV batteries. 

In addition to GM and Tesla, other innovators in the EV wars include XPeng of China, Nikola and EV newbie Lordstown Motors, but there is a long laundry list of traditional car makers: BMW, Mercedes-Benz, Volvo, Audi, Hundai, Toyota, Ford and more. As for batteries, Tesla is working with Panasonic, while Panasonic is also working on its own and is in the running alongside LG, Sanyo, Samsung and a raft of startups, according to analysts.  

Advancements in batteries broadly include removing rare Earth elements that make batteries cost so much and making the remaining materials last longer. “There are a lot of claims of making 100,000-mile batteries at half the cost with an EV range of 400 to 500 miles, but I think we need to see in real world use before we really know,” said Jack Gold, an analyst at J. Gold Associates.

Tesla and GM have lately made a number of battery tech and performance claims.

Tesla focuses on battery manufacturing

Tesla bases its claims about low-cost and efficient battery performance on designing and ramping a manufacturing system that reaches terawatt per hour scale accomplished by “rethinking manufacturing processes and equipment together with our in-house equipment design and fabrication teams.” 

Tesla’s website adds, “Future terafactories will process hundreds of metric tonnes of active material every hour so any energy, material or efficiency wins will lead to massive dividends.”

Last September 22, Tesla live-streamed a Battery Day event in which the company said it has been able to attain a 49% kWh reduction with a goal of generating 100 GWh by 2022, then 3 TWh each year by 2030 to be able to make more cars and stationary storage.

Reports say Tesla will use raw metallurgical silicon to design a cell to tolerate wear on the anode. The anode is expected to cut costs 5% or $1.20 per kWh. Musk said one assembly line could make 20 GWh, or seven times the output of previous assembly lines.

At the event Musk also said Tesla batteries have five times the energy with six times the power and 15% more range just based on their form factor alone.  He estimated 10 TWh of production is needed for 10 to 15 years for the world grid to transition over to all-electric.

GM’s Ultium battery system

GM described its Ultium battery system last March as based on large, pouch-style cells that can be stacked vertically or horizontally inside a battery pack.

This allows using six cells in a smaller vehicle or up to 24 in a large vehicle that will offer 450 miles of range per charge at 40% lower cost and 25% lower weight, GM said in its CES presentation last week.   

RELATED: GM wows CES 2021 with flying car concept, Ultium battery system and BrightDrop for logistics

GM's secret is that each battery uses aluminum with a reduced amount of cobolt in addition to nickel and manganese. 

Lower cost EVs

The question for GM, Tesla and other contenders may ultimately come down to whether battery cost and overall electric vehicle cost can be low enough to boost widespread purchases of EVs

In one indication of interest, GM has said reservations are already full for its first version Hummer EV, with initial availability in the fall. That model is priced at $112,000, with lower-priced models coming later.

How quick the lower-priced models from GM and others hit the market will matter, based on recent Deloitte research showing significantly lower buying interest in EVs than in 2019.  Researchers at Deloitte said the pandemic may have pushed down EV enthusiasm for some buyers, amid concerns about affordability.

 RELATED: GM and other automakers face Covid slowdown in electric vehicle interest

And yet, there is buyer interest and investors remain keen on the EV market.

Back in September, Musk said that preorders for Tesla’s Cybertruck were so brisk that Tesla stopped taking preorders. Slated for release in late 2021, the Cybertruck was designed to provide the utility of a truck with sports car performance and has base version sticker price of $40,000.

Tesla joined the S&P 500 on December 21 and finished 2020 with deliveries of 499,550 EVs, making it the current leader in the EV race.  Volkswagen is considered a staunch competitor, delivering 231,600 battery-electric vehicles in 2020.

Tesla currently holds about 16% of the global EV market, followed by Volkswagen with about 7%, according to recent analyst reports. In the U.S., Tesla commands about 80% of the EV market.