Tesla confirms it now makes the cheapest battery per kWh

Tesla has achieved the economies of scale and manufacturing advancements needed to craft its cylindrical 4680 battery at the lowest cost per kWh indeed.

This was first claimed by Elon Musk during an all-hands meeting keynote last month, without going into further details. It has now been confirmed by Tesla's Director of Cell Manufacturing, too, with some added context.

It turns out that Elon Musk meant the lowest cost per kWh among Tesla battery suppliers, not the cheapest EV battery cell globally. That honor most likely belongs to one of the big two Chinese battery makers CATL or BYD, but what Tesla has managed to achieve with the 4680 battery cost optimizations is still impressive.

It went from almost throwing in the towel and sourcing 4680 cells from its suppliers like LG or Panasonic, to a manufacturer of the cheapest battery it uses in less than a year. "Please don't make us do the anode, too," joked Elon Musk at the presentation, referring to the cheaper dry cathode method it has now mastered, and is quickly ramping up to achieve even lower 4680 cell costs per kWh.

"2025 will have more big milestones with fully ramped dry battery electrode manufacturing to deliver even more cost efficiency," confirmed Tesla's Director of Cell Manufacturing Michael Guilfoy while thanking the team for the stellar achievement.

Tesla is building its own lithium refinery in the US, too, so the costs of the 4680 battery are seemingly on a downwards trend. Still, it is not clear if Tesla has been able to achieve the lowest battery cost per kWh on the merits of its 4680 cell production, or with the federal tax credit for made-in-America batteries as stipulated in the Inflation Reduction Act.

It is also not clear if the dry cathode production method will be revolutionary only in terms of manufacturing costs, or will it also bring a better charging curve for the Cybertruck and other vehicles that Tesla intends to use the 4680 cells for.

A recent teardown pitted the 4680 battery against BYD cells, and it showed lower thermal efficiency, leading to the aforementioned issues with charging that is not as fast as the Cybertruck's 800V system would suggest.

After Tesla ramps up the dry 4680 battery cathode production method, it should be able to release the promised cheapest Cybertruck RWD version that already appears as an eligible trim in the federal tax credit website.

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