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Why Tesla Is Making a New Battery Format at the Gigafactory

http://fortune.com/2016/07/27/tesla-bigger-battery-gigafactory/

Tesla isn’t only making new types of cars that will drive off of electricity instead of gasoline. The company also plans to make new types of battery formats at its factory outside of Reno, Nevada.
Many conventional lithium-ion batteries that power electronics today use the format called “18-650,” which stands for 18 millimeters in diameter and 65 millimeters in length (the zero in the name is just an add-on). Tesla has used these batteries to power its Model S and Model X electric cars.
However, Tesla’s Gigafactory, which is supposed to produce its first battery cells by the end of this year, plans to produce a new format of lithium-ion batteries called the “21-70.” That stands for 21 millimeters in diameter and 70 millimeters in length.

These batteries will be wider and longer, holding more raw materials inside, and would be used in Tesla’s Model 3 electric car. That car is supposed to cost $35,000 and be out by the end of 2017. Panasonic will produce the 21-70 batteries in the Gigafactory for Tesla.
But why did Tesla decide it wanted to upend such a long running standard in the lithium-ion battery world? It’s largely about optimizing costs, explained Tesla CTO JB Straubel and CEO Elon Musk during an event at Tesla’s battery factory on Tuesday.
Straubel said that Tesla has spent a long time thinking about battery formats, and had questioned why the 18-650 lithium-ion battery had become the standard. Its standardization was “an accident of history,” said Straubel.