By on September 23, 2014

gigafactory-aerial-1

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.”

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27 Comments on “Report: Gigafactory Battery Cost As Low As $165/kWh By 2025...”


  • avatar
    ydnas7

    that report gives a cell cost of $108 / kWh

    note cell cost is not pack price

  • avatar

    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

  • avatar
    schmitt trigger

    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.

  • avatar
    cmoibenlepro

    What is the current price?

  • avatar
    SCE to AUX

    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.

  • avatar
    kosmo

    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.

  • avatar
    ckb

    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.

    • 0 avatar
      amca

      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?

  • avatar

    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

  • avatar
    Lorenzo

    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.

    • 0 avatar
      SCE to AUX

      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.

      • 0 avatar
        Master Baiter

        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.

    • 0 avatar
      Xeranar

      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.

  • avatar
    vtecJustKickedInYo

    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?

    • 0 avatar
      Xeranar

      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.

    • 0 avatar
      stuki

      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.

  • avatar
    Xeranar

    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.

  • avatar
    CoreyDL

    Oh no a giant dropped their iPhone in the desert!

  • avatar
    3Deuce27

    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/

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