Tesla's 4680 Battery Division Suspends Layoffs

On May 11, Tesla appointed a new head of the 4680 battery department, Bonne Eggleston, who then held a meeting of all employees of the department and announced the suspension of layoffs. However, the cost reduction target must be completed by the end of the year - Tesla's own 4680 batteries are cheaper than similar batteries purchased from Panasonic, LG New Energy and other suppliers.

Bona previously served as Senior Director of 4680 Batteries, where he was responsible for battery manufacturing engineering. In his new role, he will report directly to Musk and oversee the battery materials division. According to reports, Tesla's battery materials department has cut its staff by half, and the highly valued 4680 battery department has cut its staff by more than 20%, leaving only about 800 people.

Two people familiar with the matter said Tesla executives had stated earlier this year that the 4680 unit's goal was to make its own batteries cheaper than suppliers. Executives had been told that if those goals were not met by the end of the year, Tesla might abandon Project 4680. In addition, Tesla last week laid off more than 50 percent of its U.S. model design team, engineering, factory software and other departments are also cutting jobs.

The 4680 battery is at the heart of Tesla's drive to rely on technology to reduce manufacturing costs. According to the report, in 2020, Musk claimed that this battery can reduce the cost of batteries by 50%, but there is a premise - Tesla can conquer the dry positive electrode and negative electrode process. It should be noted that the positive and negative terminals are the most expensive components of the battery.

But as of March this year, the annual capacity of the 4680 battery is only enough to carry 60,000 Cybertrucks, and the cost is much higher than expected, Tesla still does not produce energy. In the nearly four years from the release of 4680 in 2020 to the mass production at the end of 2023, Ningde Times, BYD and other companies have reduced the battery cost to 0.4 yuan /Wh. Even if the cost reduction goal is completed by the end of this year, combining the information of many engineers and industry personnel, the cost of 4680 batteries may still be in the range of 0.8-1 yuan /Wh, which is twice that of Ningde era and BYD batteries, and the safety, cycle life and charging speed of this battery are weaker than mainstream batteries.