Tesla's mass production may be delayed! The production capacity of the 4680 battery is said to only meet 10% of the demand.

Recent reports indicate that Tesla's electric pickup truck, which has high hopes for driving future growth, may not be able to achieve its production targets on schedule due to the "roadblock" of battery production.

On Thursday, December 21st, Eastern Time, media sources cited multiple insiders who revealed that one of the major bottlenecks in Tesla's production is the slow production speed of its 4680 batteries. Tesla has encountered difficulties in using the new dry coating technology to produce the 4680 batteries. While the dry coating technology works fine for the anode, the problem lies in using it for the cathode, which is the most expensive component of the battery.

When using the dry coating method to bond the cathode materials, it works fine in small quantities, but when the quantity is large, it generates a lot of heat and the bonding becomes a mess. Additionally, there are also issues with the equipment used to produce the coated foil for the electrodes. In order to accelerate battery production, Tesla has attempted to simultaneously apply active battery materials at high speed on multiple foils. This requires large and wide drums to evenly apply pressure. If the force is uneven, the surface and thickness of the electrode will be uneven, resulting in waste.

A more serious problem is that Tesla has not yet established a new quality inspection system to determine which dry batteries produced are truly qualified and which ones need to be scrapped. In some cases, defects in the battery may be hidden in the coating and only become apparent after a few months.

In summary, these insiders claim that the current level of battery production using the dry coating technology has not yet reached an industrial scale, and the speed of battery production is not sufficient to meet Tesla's production targets.

When Tesla released its third-quarter earnings report in October of this year, it introduced a chart of the Texas Gigafactory for the first time, indicating that it was producing over 125,000 Tesla vehicles in a trial production state. However, Tesla CEO Elon Musk warned during the earnings conference call that increasing production would be "extremely difficult" and it may not be until 2025 that they can achieve an annual delivery of 250,000 vehicles.

According to media estimates, based on the current production speed of the 4860 batteries at the Texas factory, it is only enough to equip approximately 24,000 Tesla vehicles in a year, which is about one-tenth of Tesla's truck production needs.

Based on the number of batteries required for Tesla vehicles equipped with the 4680 battery pack, Tesla needs to produce 340 million batteries in a year, which is nearly 1 million batteries per day, in order to supply 250,000 Tesla vehicles. However, according to insiders, it currently takes about 16 weeks for the Texas factory to produce 10 million batteries. At this rate, the annual production would be 32.5 million batteries, which would only be enough for 24,000 vehicles, even if they were all supplied to Tesla.

These estimated numbers do not include the fact that the 4680 batteries will also need to be supplied to other vehicle models. Tesla has previously stated that it plans to use the 4680 batteries in the low-priced electric vehicle priced at $25,000, also known as the Model 2.

However, some of the aforementioned insiders predict that Tesla may make progress in expanding the production of the 4680 batteries, especially once the technology on one production line becomes stable.During the earnings conference call in October, Musk revealed that Tesla's orders have exceeded 1 million, which means that once production capacity improves, Tesla's revenue will be substantial.

After starting deliveries of Tesla at the end of last month, Tesla announced that the dual-motor and tri-motor versions, which will be delivered in 2024, will be priced at $79,990 and $99,990 respectively. The more affordable single-motor standard version is priced at $60,990, with delivery on the official website scheduled for 2025.

Subsequently, analysts have pointed out that it will take time for Tesla's production capacity to ramp up and that the market space is relatively limited. At the same time, the high prices may deter some potential consumers and lead them to turn to other more cost-effective alternatives.

Analysts predict that by 2025, Tesla's revenue contribution to Tesla may be less than 5%, with almost zero profit.

Although Tesla's contribution to Tesla's profits may be very limited, it could greatly benefit its brand image. Tesla's financial and stock market success relies on the minimalist design of the Model 3 and Y platforms, while its brand image is largely built on complex high-tech technology and the continuous fulfillment of promises. Tesla may help strengthen the brand image and consolidate its brand influence among Tesla fans who love technology, making it a substantial "advertising department" for Tesla.

Previously, analysts believed that Cybertruck might be able to boost Tesla's overall sales through the halo effect of the brand.

Tesla has experienced a halo effect before. When the Model Y was launched in 2020, investors were concerned that it would cannibalize the sales of the Model 3, but that was not the case. Last year, Model 3 sales in the United States exceeded those of 2020, and Model Y sales exceeded 250,000 units. Tesla's total sales in the United States increased by 150% compared to 2020, with both the Model Y and Model 3 being hot sellers.