Thread by @ReflexFunds

1)A big question from Battery Day was how advanced were Tesla’s chemical engineering based innovations?
(Particularly vague references to new sulphate free processes).
Key to many of the advances, yet it wasn’t widely known that Tesla even had Chemical Engineering R&D teams

2) Part of the lack of detail in this section was likely due to protecting IP & partly because it would have gone over the audience’s head even more than the rest of the material. But was it also because these projects were less advanced than the rest? It is hard to know.

3) High level of speculation follows below.

In my view many of the cathode raw material innovations may have spun out of R&D work on Battery recycling, Battery materials & even waste water treatment at Giga Nevada.

4) I think the Jim Keller or Andrej Karpathy of the cathode & raw materials side of Battery Day may have been Ryan Melsert (R&D Manager, Battery Materials & Energy Systems Feb-16 to Mar-19) & JB Straubel.

5) Ryan was potentially appointed by Elon to head a focussed electrode material R&D commercialisation team in 2016 similar to hiring Jim Keller to solve the FSD computer

6) The team may have been driven in part by Elon’s trademark method of relentlessly questioning the team on Physical limits & asking them to question the assumptions in their industry.

7) Ryan’s team worked on:
(Note I'm sure there were many more teams at Tesla contributing to cathode materials too who deserve credit for their hard work.)

8) It possible that some of Tesla’s methods will be first rolled out at scale with the start of large scale in-house battery material recycling at Giga Nevada.

9) So how far away are Tesla's cathode material processing changes?
I think Tesla has worked on this longer than people realise & its underestimated how much can be achieved by a smart & driven team with a first principles physics engineering philosophy & heavy resources.

10) But there are still very high risks on scaling everything to commercialisation, particularly on lithium.

11) I would split Tesla's lithium stategy into four possible parts;
A) Continuing to purchase Lithium Hydroxide from large suppliers (predominantly from Australian spodumene). This is very likely to remain the majority of supply in the medium term.

12) B)
Building a Lithium Hydroxide plant (I assume?) co-located with cathode factory in Texas which Tesla calls a 100% electric & solvent free process. (A new process? Execution risk is high even on established tech). Feedstock may be spodumene or aqueous lithium chloride?

13) C) The most speculative; in-house production of lithium from clay via a very complicated process simplified by Drew to "Simply mix clay with salt, put it in water, salt comes out with the lithium, done".

14) D) If this is ever achieved I expect this process to be performed at mine site (Tesla says in Nevada) with an intermediary product shipped to the Texas lithium plant (possibly aqueous lithium chloride?).

15) Note many lithium experts speculate Tesla's lithium clay plan announcements were aimed at supporting pricing negotiations with lithium suppliers.

16) I think Tesla has likely worked more on this project than they're given credit for, but there is still a very high chance they never de-risk their clay process through to commercialisation.

17) E) Potential M&A of an existing and more advanced lithium resource with a more de-risked flow sheet to accelerate vertical integration to mine level.

18) I expect a similar story for Nickel to some degree but Tesla has not yet outlined aims for such extreme vertical integration.