Tesla Inc (NASDAQ:TSLA) CEO Elon Musk on Friday termed the use of dry cathode 4680 cells in the company's stainless steel Cybertruck "a major breakthrough" capable of major cost reduction to the company.

What Happened: "It is a major breakthrough," Musk wrote on X in response to Tesla enthusiast and investor Sawyer Merritt who also termed the use of dry cathode 4680 cells a "big deal."

Merritt wrote in a post that the use of dry cathode 4680 cells can help Tesla reduce costs between 15% and 30% if they can scale production and may also result in higher-density batteries.

"If they can figure out how to scale it, and with good yields, it will be a game changer," Merritt wrote.

Musk did not detail the benefits of the new technology himself in his response but is seemingly in agreement with Merritt.

Why It Matters: Tesla uses 4680 cells to power the Cybertruck. Presently, the 4680 cells being manufactured by the company for the Cybertruck have cathodes manufactured using a more conventional "wet" process involving the use of a toxic solvent. In the second quarter, Tesla produced 50% more 4680 cells than the first quarter, the company said.

Tesla started testing its prototype Cybertruck produced with in-house "dry" cathode 4680 cells in July. Once it goes into production, the use of in-house dry cathode 4680 cells would enable major cost reduction, the company said during the company's second-quarter earnings call in June. Cybertruck production is on track to achieve profitability by the end of the year.

The launch of production Cybertrucks with dry cathode 4680 cells is expected in Q4, Tesla's Vice President of Vehicle Engineering Lars Moravy said last month during a call with analysts.

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