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# Source: Wall Street CN

By Ye Huiwen

Elon Musk, CEO of Tesla, confirmed that the company has overcome technical hurdles and achieved mass production of the dry electrode process, which he described as a **major breakthrough** in lithium battery manufacturing technology. Abandoning traditional toxic solvents and costly drying steps, this technology can drastically cut manufacturing costs and energy consumption, while promising to boost battery energy density and lifespan. It will provide crucial support for Tesla to consolidate its cost and efficiency advantages in electric vehicles and the fast-growing energy storage business.

Elon Musk, CEO of Tesla, confirmed that the company has broken through key technical bottlenecks in lithium battery manufacturing and successfully commercialized the dry electrode process for mass production. Hailed by Musk as a "major breakthrough" in lithium battery production technology, this achievement marks a pivotal step for the electric vehicle industry in reducing manufacturing costs and improving production efficiency.

In a post on social media platform X, Musk stated that scaling up the dry electrode process from the lab to mass production was extremely challenging and an "incredibly difficult" task. He extended special congratulations to Tesla's engineering, production, supply chain teams and strategic partners, confirming that the company has solved this long-standing technical puzzle plaguing the battery industry.

The news comes as Tesla's energy storage business is showing robust growth momentum, and the implementation of dry electrode technology is expected to further solidify its competitive edge in energy storage and electric vehicles. While Tesla's share price closed 3.32% higher at $430.41 on Friday, it fell 1.65% in after-hours trading, with the market closely watching the potential boost this technological innovation may bring to future profit margins.

Tesla officially elaborated on the commercial value of the technology, noting that the dry electrode manufacturing process not only slashes costs and energy use significantly, but also streamlines factory processes and greatly enhances scalability. This progress means Tesla is likely to have lower capital expenditure requirements and higher production flexibility in future battery capacity expansion.

## Mass Production: From "Impossible" to Reality

The core of this breakthrough lies in solving a technology long deemed unmanufacturable at scale by the industry. A social media user @tslaming shared relevant Tesla patent documents on X, which subsequently prompted a confirmation response from Musk. @tslaming pointed out that the battery industry has widely considered mass production of dry electrodes impossible for years, dismissing it as an unscalable "lab trick". However, Tesla's newly published patent applications show that the company has locked in the "secret formula" for dry electrode manufacturing.

In his response, Musk emphasized the difficulty of achieving this goal, calling it a major breakthrough in lithium battery production technology. The successful implementation of this technology breaks the industry's reliance on the traditional wet solvent coating process in battery manufacturing and validates the feasibility of the dry process in industrial-scale production environments.

## Technological Advantages: Lower Costs and Higher Efficiency

According to information disclosed by Tesla's official statements and patents, the dry electrode process boasts significant cost and environmental advantages over the traditional wet process. Simply put, it eliminates the need for toxic wet solvents such as N-Methyl-2-pyrrolidone (NMP), which usually pose substantial risks to the environment and human health.

In the traditional process, electrode coating requires the use of wet solvents, which are then dried in large, expensive drying ovens. By contrast, the dry electrode process directly coats active materials onto electrodes through heat or pressure. This method not only streamlines the manufacturing process and eliminates costly drying steps, but also reduces energy consumption and factory floor space requirements.

Furthermore, the technology delivers performance improvements. Relevant patents show that Tesla has designed an all-dry cathode that can deliver maximum energy with a minimal amount of binder (as low as 1.25%), thereby increasing battery energy density, driving range and overall performance. At the same time, the process better preserves particle integrity and extends battery lifespan (e.g., retaining approximately 90% of capacity after 2,000 charge-discharge cycles).

## Business Background: Booming Energy Storage and EV Sales Challenges

This technological breakthrough comes at a critical juncture for Tesla's business development. The company's Q4 financial report showed that its energy storage business maintained steady growth, with annual energy storage deployments surging to 46.7 gigawatt-hours (GWh). As early as Q3, Tesla's energy storage revenue had recorded a 44% year-on-year jump to $3.4 billion. The application of dry electrode technology is expected to further support the low-cost, high-efficiency manufacturing of electric vehicles and grid storage products.

However, Tesla is facing certain pressures on the electric vehicle sales front. Data shows that in December 2025, Tesla's sales in the European market reached 35,280 units, a year-on-year drop of 20.2% compared to 44,190 units in the same period of 2024. Against this backdrop, cutting the cost of core components through technological innovation is particularly important for Tesla to maintain market competitiveness and profit margins.

According to Benzinga Edge Rankings data, Tesla currently scores well on momentum indicators and boasts a favorable long-term price trend.

## Risk Warning and Disclaimer

The market is risky, and investment requires prudence. This article does not constitute personal investment advice, nor does it take into account the specific investment objectives, financial status or needs of individual users. Users should assess whether any opinions, views or conclusions in this article are consistent with their own specific circumstances. Any investment made based on this article shall be at the investor's sole risk.