Cybertruck 4680 battery cathode delays and Model 2 production demise behind layoffs at Tesla

Just as it looked like from the fact that Tesla heads announced they are leaving to spend more time with their families, some of their projects brought Tesla's round of layoffs.

New reports shed light on what project developments were deemed unsatisfactory by Elon Musk, to the extent that Tesla had to part ways with long-time employees.

4680 battery delays

Starting with former powertrain and energy head Drew Baglino, it's the slow ramp of 4680 battery production and the expenses incurred in building Tesla's own cathode factory at Giga Texas.

While it is not clear if Elon Musk was unhappy with the developments around the coveted dry cathode production method, or just with progress in general, one Tesla employee defined the cathode manufacturing project as a "financial black hole."

When Tesla announced the 4680 cell at its Battery Day in 2020, Elon Musk and Drew Baglino bragged that it will be able to slash costs in half compared to other battery formats. According to Musk's biography, he and Drew have had some disputes since then, and Tesla is nowhere near its 4680 cell goals in terms of production capacity, let alone those lofty manufacturing cost aspirations.

Most of the 4680 battery cost savings have come from the easy design part that requires less welding points and allows that it be used in a structural chassis pack. The hard chemistry part, however, which is the dry cathode production method that doesn't require toxic materials and vast baking facilities, has been much harder to pull off in sufficient quantities.

Granted, Drew confirmed in one of the first Cybertruck walkthroughs with Sandy Munro that the 4680 battery cells in it are made with the dry cathode method. Subsequent rumors, however, pegged Tesla's production capacity for those at just 2,000 packs a month.

Perhaps that is why, besides Drew Baglino, Tesla has also let go its Senior Manager of Cathode Manufacturing Anthony Thurston, who was in charge of the Giga Texas cathode expansion.

After all, the 4680 battery is the main bottleneck for the Cybertruck's production ramp, after Tesla spent years focusing on the pickup instead of a mass market electric vehicle.

Model 2 and Robotaxi delays

While Elon Musk countered the news that Tesla has chucked the affordable Model 2 vehicle with a Robotaxi announcement date, the NV9 "Redwood" project has indeed been scrapped at Giga Texas, tip insiders. Apparently, a lot of the people associated with the Model 2 assembly plans are now also being let go as part of Tesla's current round of layoffs, too.

Instead of the factory section where it would've been assembled, Elon reportedly tasked everyone to focus on a south expansion where a new Robotaxi data center, similar to the Dojo supercomputer one in New York, is supposed to be built.

Even the Robotaxi data center, however, which employees also call Dojo internally, is now facing delays as the weather in Texas is pretty bad for construction at the moment. Elon Musk has reportedly set August 20 as the deadline for its completion, shortly after the Robotaxi unveil, but that date is now in jeopardy, and the head of construction at Giga Texas has been laid off as well.

The two Dojo data centers in New York and Texas are supposed to crunch the numbers for Tesla's ambitious AI-driven Robotaxi project, as Tesla will need all the real-life data it can lay its hands on to make it work for autonomous vehicle regulators.

Coincidentally, Tesla's VP of Public Policy who was in charge of securing regulatory permits, too, has now also been laid off, indicating that Elon may intend to reinvigorate Tesla's public policy forming effort, or take it in a new direction.