Tesla’s battery supplier CATL has shared with Bloomberg that it can now provide the million-mile batteries with life-span of 16 years to the market. This technological breakthrough could be the key to unlock the explosive EV market growth.

Image by Blomst from Pixabay

In an interview with Bloomberg, the chairman of Tesla’s major battery supplier CATL, Zeng Yuqun, has announced that the company is ready to make Elon Musk’s dream come true: the million-mile batteries

“If someone places an order, we are ready to produce.” said CATL

The fact that batteries are very crucial to the electric vehicle adoption, due to both financial and technical reasons, made this breakthrough even more important in this budding market.

Tesla’s R&D Strategy Regarding Batteries Has Been the Center of Attention

In May, Tesla has filed for a patent application involving a new battery design, which was produced as a result of collaboration between Tesla and battery expert Jeff Dahn and his team, according to Teslarati.

Lately, there have also been reports from several news outlets stating that Tesla and CATL have reportedly joined forces to make the million-mile batteries which Tesla founder Elon Musk envisioned.

And Tesla’s Model 3 from the factory in Shanghai is likely to be the first customer, as reported by Elektrek.

CATL is ready to produce a battery that lasts 16 years and 2 million km (1.24 million miles).

“If someone places an order, we are ready to produce,” said Zeng Yuqun in the interview with Bloomberg, signaling the million-mile battery’s commercial readiness.

Elektrek also writes that the chairman pointed out the batteries will be 10% more costly than other EV batteries currently available in the market: “Contemporary Amperex Technology Co Ltd (CATL) is ready to produce a battery that lasts 16 years and 2 million kilometres (1.24 million miles).”

Why the Breakthrough in EV Batteries Are So Important

EV batteries are the most expensive part of the electric vehicles as well as the part that has been holding back the adoption of EV, according to Business Insider.

CATL vs EV Deal Breaker #1: Limited Driving Range

Many prospective car buyers have expressed their concerns over the driving range of electric vehicles. Despite the advantages of the eco-friendly electric vehicles, the limited driving range can discourage the most eco-conscious car buyers.

Therefore a commercially ready battery that could run a million miles without having to be swapped or charged is a real game changer.

CATL vs EV Deal Breaker #2: EV’s Expensive

Additionally, CATL’s new battery has the life-span of 16 years, which makes it very appealing to consumers.

The battery is the heart of an electric vehicle, which is, unsurprisingly, the most expensive part of an electric vehicle. It is also part of the reasons why the EV prices are slow to be driven down.

Despite being 10% higher than the competing products, CATL’s batteries with 16 years of life span will pay itself over the years.

Even though CATL’s latest product cost 10% more, consumers are likely to regard it as a bargain. With batteries that could stay functional for 16 years, that extra 10% will pay itself over time.

According to BloombergNEF’s EV Battery Price Survey, EV batteries used to cost US$1,100 /kWh, which has dropped 87% to US$156 /kWh in 2019. By 2023, the average prices will be as low as US$100 /kWh, the point where electric vehicles will achieve price parity.

The Growing Demand for Electric Vehicles Will Drive Down the Price

Passenger electric vehicle sales surged from 450,000 in 2015 to 2.1 million in 2019. And the sales is projected to rise to 8.5 million by 2025, 26 million by 2030, and 54 million by 2040, according to BloombergBNF.

The adoption of EV will also pick up: It makes up only 2.7% of the total new car sales. However, by 2040, 50% of the new car sales will be contributed by electric vehicles.

For people who still find CATL’s new batteries too expensive, there is still hope. As the EV demand and sales are growing rapidly, the price of EV will go down over time and will not seem as daunting as before.