Elon Musk claims Cybertruck 4680 battery is now cheapest per kWh as Tesla masters dry cathode

Elon Musk got on stage for some employee pep talk during an all-hands meeting, and claimed that Tesla's 4680 battery cells are now the cheapest in the world to manufacture per kWh.

It didn't become clear if Elon meant that the 4680 battery is cheapest to make with the rather generous made-in-America federal subsidy of up to $45/kWh, as stipulated in the Inflation Reduction Act (IRA), or on its own.

Still, this bodes well for the price of the RWD Cybertruck that is expected to be released later this year, because the IRA subsidies are scheduled to run until 2032. Unless the new Trump administration stops them, that is, as seems to be its intention.

As if to back Elon's claims, however, the head of the Tesla's battery department Bonne Eggleston went out to confirm on a separate note that Tesla will be making Cybertruck 4680 cells with the frugal dry cathode method en masse "in a couple of months."

What's a bit confusing about these statements is that Tesla already bragged with the first Cybertruck made with the revolutionary dry-cathode 4680 battery way back in July last year. It now seems that has just been a proof of concept vehicle, and Tesla has been nowhere near ready to produce 4680 cathodes with the faster, cheaper method on a mass scale at the time.

Tesla has struggled for years to achieve what it promised on Battery Day 2020, namely a 50% reduction in manufacturing costs with the 4680 battery. The bulk of the savings so far came from the packaging efficiency inherent to the 4680 form factor, as the cells are larger and less numerous, hence require fewer welding points and can be used for a structural battery as part of the chassis.

The so-called dry cathode production method, however, which can make a 4680 cell 20%-30% cheaper as it doesn't require baking of the electrodes after using toxic solvents for their coating, has remained elusive. Tesla bought the technology from Maxwell, but it turned out to be unsuitable for mass scale production. It had major issues with the rolling machines necessary for pressing the dry coating onto the cathode breaking all the time, up to the point where less than a third of the production was viable. That's compared to an industry standard rejection rate of 2%.

To meet Elon Musk's claims that the 4680 battery is the cheapest per kWh in the world now, Tesla must have reinforced the dry coating cathode machines, or slashed costs in other ways enough that the federal subsidies pushed it under the "cheapest battery" threshold.

In any case, it expects mass production of the dry cathode 4680 battery for the Cybertruck to start in a few months, including record production at Giga Nevada, at which point it might introduce a much cheaper RWD Cybertruck.

Whether or not the new cells will have the same thermal efficiency issues as the current ones that prevent the Cybertruck from faster charging despite its 800V architecture, remains to be tested.

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