One of the main goals of Tesla’s Gigafactory is to bring down battery pack costs to just under $100 per kilowatt-hour within 10 years. That goal may be harder to achieve, however, according to one skeptic.
Charged Electric Vehicles reports Dr. Menahem Anderman of Advanaced Automotive Batteries recently released a report (one that few, especially TTAC, are willing to pay $2,800 to read in full) about Tesla’s battery tech and its role in the grand scheme of electrification.
In particular, Anderman expresses his doubts that Tesla can actually bring down pack costs to below $100/kWh before 2025:
Our assessment shows that pack pricing for the 2025 time scale could be as low as $167/kWh… Pack cost much below $200/kWh is unlikely before 2020.
Further, he doesn’t believe the automaker can also bring a $35,000 EV to market by 2017, proclaiming the upcoming Model 3’s price tag “will be in the range of $50k-80k,” and that the Gigafactory’s use of solar power is “mostly for image and political reasons.”
that report gives a cell cost of $108 / kWh
note cell cost is not pack price
From the auto dealer world –
http://wardsauto.com/blog/who-s-afraid-elon-musk#comment-35041
http://seekingalpha.com/news/1993365-gm-backed-car-battery-a-game-changer
The real issue is the continuing surge in demand (which drives price) of lithium.
True, new mines and processing facilities are being developed.
But lithium battery usage has grown exponentially, with billions of mobile electronic devicess, power tools and the like.
What is the current price?
Nissan has priced the Leaf’s replacement pack at $5500, which works out to $229/kWh today.
Are they (Nissan) taking a bath on it? I don’t know. But it casts doubt on this guy’s skepticism.
It’s preposterous to think the Model 3 will go for $50-80k, which is Model S territory. I can see a bare-bones 3 going for $35k, and one with all the trimmings going for $55k. I’d guess that most will sell in the $40k range.
One thing we’d agree on is that Tesla has staked its future on this factory’s role, and Panasonic has a stake as well (but much less risk). They’ve probably all thought it through pretty well.
In New England, Nissan is continuing to offer $3500 off of the sticker for the LEAF S. With the federal $7500 and the MA state $2500, it brings the price down to $15,510.
It’s difficult, or impossible, to forecast future battery cost reductions based on technological advances, since they can’t be predicted with any certainty.
The next “leap” in battery tech could take 20 years, or 20 days.
So that leaves the gigafactory reaping the benefits of economy of scale manufacturing efficiency improvements, which might be significant, but it’s very difficult to believe that they will be twice as good as anybody else in the world.
You can get a model S in the $50-$80k price range today….$69900 base price according to their website. This guy doesn’t see any possible cost reduction in a higher volume, smaller car with a smaller next generation battery pack? I’d believe $35k is going to be tough (but not impossible) to meet but the good doctor has swung too far in the opposite direction attempting to peddle his report.
It’ll cost $35k if they can continue to recruit new donors . . . er, shareholders.
If the shareholders start acting like shareholders, the Model 3 is going to sticker for $45k to start. And besides, why build a car that’s half the price of its big brother, which still has a waiting list?
Though the entire report is $2,800, Dr. Anderman has put a relatively detailed summary online (while redacting the stuff he thinks is worth $2,800):
http://advancedautobat.com/industry-reports/2014-Tesla-report/Extract-from-the-Tesla-battery-report.pdf
With regular unleaded containing 33.44 kWh/gallon, the price of storage batteries has to drop a lot more than even what Tesla is contemplating. Cheap to operate coal fired electrical generation is being shut down, and the price of electricity to charge those batteries is going up, while US oil production has reduced imports from 55% to 20%. What’s really driving electric cars and alternate fuels is CAFE and more stringent emissions standards, not economics.
Operational costs for an EV are about $0.03 to $0.05 per mile. My last 30 mpg car cost about $0.12 per mile.
You don’t need battery pack prices to become equivalent to gasoline prices, because the battery pack far outlasts a tank of gas.
The economics are more complex than that, involving new car price, operational costs, battery degradation and replacement costs, and the comparative costs associated with an ICE.
I’m sure the differential shrinks when you consider maintenance and other wear items. My rough calculation says tires alone are about $0.02/mile and would be the same for EV and ICE.
And as wind and solar pickup substantially the cost of electricity will remain stable in the long term. In fact solar is at parity in close to 17 states and in 5-6 years it’ll be at parity in 30+ based on current estimates.
Link by chance?
I’m on my phone, but I shall get you that link. I just saw it a few days ago and was surprised myself.
The only way solar is at parity with fossil fuels is if fossil power is priced artificially high. That’s what they do here in CA to encourage residential solar.
I am wondering how Tesla will be able to meet the labor requirements for this Facility. I know it is by Reno but I wonder if the surrounding areas will be able to support an influx of x number of new facility employees?
It shouldn’t be a serious issue. 6500 new jobs entering the Reno-Sparks MSA/CSA would be a relatively small bump. Housing may go up slightly for a time but it shouldn’t be a huge issue.
I’m only exaggerating a tiny bit by saying I personally know that many engineer/tech people in Santa Clara alone, who are chomping at the bit to make the move. Silicon Valley is becoming the domain of young guys with big ambitions. 4 guys to a $5k/month 2 bedroom apartment in a permanently polluted rush hour where even Top Ramen is expensive; is only acceptable as long as the dream is alive. Once the 9 out of 10 of those guys who did not get bought out or IPOed accept it ain’t gonna happen, the only ting keeping them is the dearth of employment opportunities outside the pressure cooker.
Reno/Tahoe is an incredibly shrewd move for Tesla recruitment wise. And also in terms of being able to move activity to a lower cost/lower regulated state, should Ecars get mainstream enough that competitive pressures starts becoming more important political correctness considerations.
As one PhD to another, sorry you may be right and Tesla can’t do it but sitting there on your pedestal proclaiming yourself a battery authority isn’t going to win you my respect. If this was a peer reviewed analysis I would sadly agree with them but his analysis seems to be seriously pessimistic compared to other active participants. Maybe he’s ahead of the curve on all this but it sounds like a bit of navel gazing for some face time.
The other general sources agree that Tesla’s goal of $100/KwH goal is high but not so out of reach as to be insane. His estimate is almost $50-70 higher than every other report I’ve seen.
Agreed. Tesla is often spinning positive, but they will surely be much more competitive than he predicts.
Oh no a giant dropped their iPhone in the desert!
With 2 Supercharger cables attached!
Is it bad that I laughed at that? :S
It’s actually a prototype for the iphone 7 plus plus…
It’s very annoying to me that phone companies (now they’ve all the same tech) must resort to “different shape” or “larger screen” as their gimmick. The trend seems toward the latter of those options.
This plant could become obsolete and maybe not long after it opens.
Is the storage density that would allow 500 miles, or even 1,855 miles between charges, just around the corner, at a price point that would also quickly obsolete fueled vehicles. Lets hope so.
http://www.scientificamerican.com/article/secretive-company-claims-battery-breakthrough/
http://news.sciencemag.org/technology/2014/09/new-battery-design-could-help-store-green-energy
http://cleantechnica.com/2014/07/30/new-battery-boasts-7-times-energy-density/