Major breakthrough in lithium batteries! Musk: Tesla achieves mass production of dry electrode batteries.

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Tesla CEO Elon Musk has confirmed that the company has overcome key technological bottlenecks in lithium battery manufacturing and has successfully achieved large-scale production of dry electrode technology. Musk called this breakthrough a "major advancement" in lithium battery production technology, marking a significant step forward for the electric vehicle industry in reducing manufacturing costs and improving production efficiency.

Musk stated on social media platform X that transitioning the dry electrode process from the laboratory to mass production was extremely challenging and "extremely difficult." He specifically congratulated Tesla's engineering, production, and supply chain teams as well as strategic partners, confirming that the company has solved a technical problem that has troubled the battery industry for years.

This announcement comes as Tesla’s energy storage business is showing strong growth momentum, and the implementation of dry electrode technology is expected to further consolidate its competitive advantage in energy storage and EV sectors. Although Tesla’s share price closed up 3.32% at $430.41 on Friday, it fell 1.65% in after-hours trading. The market is closely watching the potential impact of this technological innovation on future profit margins.

Tesla officially further explained the commercial value of this technology, noting that the dry electrode manufacturing process can significantly reduce costs and energy consumption, greatly streamline factory processes, and "greatly" enhance scalability. This progress suggests Tesla may need lower capital expenditures and have higher production flexibility in future battery capacity expansions.

Large-Scale Production: From "Impossible" to Reality

The core of this breakthrough lies in solving a technology long considered difficult to mass produce by the industry. Social media user @tslaming shared Tesla's relevant patent documents on X, which triggered Musk's confirmation. @tslaming pointed out that for years, the battery industry had generally believed that large-scale production of dry electrodes was impossible and saw it as an unscalable "lab trick." However, Tesla’s newly released patent application shows the company has locked down the "secret formula" for manufacturing dry electrodes.

In his response, Musk emphasized the difficulty of achieving this goal, calling it a significant breakthrough in lithium battery production technology. The successful implementation of this technology breaks the traditional reliance on wet solvent coating processes in battery manufacturing and confirms the feasibility of dry processes in industrial production environments.

Technical Advantages: Lower Cost and Higher Efficiency

According to Tesla's official information and patent disclosures, the dry electrode process offers significant cost and environmental benefits compared with traditional wet methods. In short, the process eliminates the need for toxic wet solvents such as N-methyl-2-pyrrolidone (NMP), which typically pose serious risks to the environment and human health.

Traditional methods require wet solvents in electrode coating, followed by extensive drying ovens. The dry electrode process uses heat or pressure to apply active materials directly onto the electrode, simplifying the manufacturing process, removing costly drying steps, and reducing energy use and factory footprint.

Furthermore, the technology also brings performance improvements. Related patents show Tesla has designed a pure dry cathode that can use minimal binder (as low as 1.25%) to deliver maximum energy, boosting battery energy density, driving range, and performance. This process also better maintains particle integrity and extends battery lifespan (for example, maintaining about 90% capacity after 2,000 cycles).

Business Background: Energy Storage Growth and Automotive Sales Challenges

This technological breakthrough comes at a critical time in Tesla's business development. The company’s Q4 financial report shows its energy storage business maintained steady growth, with annual energy storage deployments reaching 46.7 gigawatt-hours (GWh). As early as Q3, Tesla’s energy storage revenue surged 44% year-over-year to $3.4 billion. The adoption of dry electrode technology is expected to further support the low-cost, efficient manufacturing of electric vehicles and grid storage products.

However, Tesla is facing some pressure on the automotive sales front. Data shows that in December 2025, Tesla’s sales in the European market were 35,280 units, down 20.2% from 44,190 units in the same period in 2024. Against this background, reducing core component costs through technological innovation is especially crucial for Tesla to maintain its market competitiveness and profitability.

According to BenzingaEdgeRankings data, Tesla currently scores well on momentum indicators and has favorable long-term price trends.

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