Major breakthrough in lithium batteries! Musk: Tesla achieves large-scale production of dry electrode batteries

Tesla CEO Elon Musk confirmed that the company has overcome key technical bottlenecks in lithium battery manufacturing and successfully achieved large-scale production of dry electrode technology. This breakthrough is described by Musk as a "significant advancement" in lithium battery production technology, marking a critical step for the electric vehicle industry in reducing manufacturing costs and improving production efficiency. Musk stated on the social media platform X that transitioning the dry electrode process from the laboratory to large-scale production is highly challenging and an "extremely difficult" task. He specifically congratulated Tesla's engineering, production, supply chain teams, and strategic partners, confirming that the company has resolved this long-standing technical issue that has plagued the battery industry. As this news was released, Tesla's energy storage business is showing strong growth momentum, and the implementation of dry electrode technology is expected to further strengthen its competitive advantage in the energy storage and electric vehicle sectors. Although Tesla's stock price rose 3.32% to $430.41 at Friday's close, it fell 1.65% in after-hours trading, with the market closely monitoring the potential impact of this technological innovation on future profit margins. Tesla further elaborated on the commercial value of this technology, noting that the dry electrode manufacturing process can significantly reduce costs and energy consumption, greatly simplify factory processes, and "greatly" enhance scalability. This advancement means that Tesla may have lower capital expenditure requirements and greater production flexibility in future battery capacity expansions. Large-Scale Production: From "Impossible" to Reality The core of this breakthrough lies in solving a technology that has long been viewed as difficult to mass-produce in the industry. Social media user @tslaming shared Tesla's related patent documents on X, which prompted Musk's confirmation response. @tslaming pointed out that the battery industry has long considered large-scale production of dry electrodes to be impossible, viewing it as an unscalable "laboratory trick." However, Tesla's latest patent application shows that the company has locked in the "secret formula" for dry electrode manufacturing. Musk emphasized the difficulty of achieving this goal in his response, calling it a major breakthrough in lithium battery production technology. The successful implementation of this technology breaks the reliance on wet solvent coating processes in traditional battery manufacturing and validates the feasibility of dry processes in industrial production environments. Technical Advantages: Lower Costs and Higher Efficiency According to information disclosed by Tesla's official sources and patents, the dry electrode process has significant cost and environmental advantages over traditional wet processes. In short, this process eliminates the need for toxic wet solvents such as N-Methyl-2-pyrrolidone (NMP), which typically pose significant risks to the environment and human health. In traditional processes, electrode coating requires the use of wet solvents, followed by the need for large drying ovens. The dry electrode process, on the other hand, directly applies active materials to the electrode using heat or pressure. This method not only simplifies the manufacturing process and eliminates expensive drying steps but also reduces energy consumption and factory footprint. Additionally, this technology brings performance improvements. Relevant patents indicate that Tesla has designed a pure dry cathode that can provide maximum energy with minimal binder (as low as 1.25%), thereby enhancing the battery's energy density, range, and performance. At the same time, this process better maintains particle integrity, extending battery life (for example, retaining about 90% capacity after 2000 cycles). Business Background: Growth in Energy Storage and Challenges in Vehicle Sales This technological breakthrough comes at a critical time for Tesla's business development. The company's fourth-quarter financial report shows that its energy storage business continues to grow steadily, with annual energy storage deployment reaching 46.7 gigawatt-hours (GWh). As early as the third quarter, Tesla's energy storage revenue recorded a year-on-year surge of 44%, reaching $3.4 billion. The application of dry electrode technology is expected to further support the low-cost and efficient manufacturing of electric vehicles and grid storage products. However, Tesla faces certain pressures in vehicle sales. Data shows that in December 2025, Tesla's sales in the European market were 35,280 units, a 20.2% decrease compared to 44,190 units in the same period of 2024. In this context, reducing the cost of core components through technological innovation is particularly important for Tesla to maintain market competitiveness and profit margins. According to BenzingaEdgeRankings data, Tesla currently scores well on momentum indicators, and the long-term price trend is favorable.