Tesla's 4680 batteries may put them ahead of rival EV makers

Mass-producing its 4680 battery cells could boost the brand. According to a new report, that could save Tesla $5,500 per Model Y sold. That's 8% of the SUV's U.S. starting price.

Tesla introduced the 4680 battery cell two years ago and has been scaling up production since then. The cell is superior to Tesla's 2170 battery. It's bigger, which matters in this context.

Tesla can use fewer batteries by increasing their size. Model Y has 4,400 cells. The 4680 battery pack reduces that to 830 cells. 

The new 4680 battery requires two welds per cell, compared to the 2170's four. The reduction from 17,600 to 1,660 welds per vehicle is significant, but it's not the only reason for the change.

The 4680 battery cell uses a dry coating process, which is more environmentally friendly and less labor intensive than wet coating. 

Tesla expects to cut capital spending by a third and reduce its factory footprint and energy use by a tenth once mass production begins.

“They can produce in small volume, but when they started large-scale production, Tesla had too many rejects,” a source told Reuters.

Tesla is expected to solve the problem this year or in 2023. Musk said in August that Tesla would mass-produce the 4680 cell by the end of the year.