Elon Musk is generally careful not to use the term “breakthrough” when describing advancements in battery technology but he has used it this week to talk about Tesla’s latest advancements in battery energy density and cost.
Tesla’s CEO even gave us a pretty good idea of the automaker’s current battery costs.
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One of the automaker’s most important goal is to achieve a battery pack cost of $100 per kWh.
At that cost, the battery pack isn’t a bottleneck to achieve price parity with gas-powered cars, which would make any of Tesla’s vehicles even more competitive.
Tesla has always been careful about not revealing its battery cost and CTO JB Straubel reiterated that at the meeting this week.
But Musk later did reveal a few interesting details and price points.
After thinking about it for a moment, Musk added:
“We think we have come up with some pretty cool breakthroughs on energy density and cost of the battery pack. It’s going to be pretty great.”
The CEO thinks that the company is on pace to achieve a battery cell cost of $100 per kWh by the end of the year depending on commodity prices remaining stable in the next few months.
While we are only talking about battery cell costs and not the cost of the whole battery pack, it would still be an impressive price point.
As for the cost at the pack level, Musk sees Tesla achieving that important price point of $100 per kWh for the overall battery pack in less than two years.
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So $100 by 2020. Extraordinary.
Apart from the battery, EVs are cheaper to produce than ICEVs (petrol/diesel cars) because they're much simpler. At a battery pack cost of $100/kWh, EVs will not just have the same sticker price as ICEVs--they will be cheaper than ICEVs. So, cheaper sticker price, cheaper "fuel" cost because of EVs' higher efficiency and cheap electricity, much cheaper maintenance, smoother and quieter ride .... EVs won't achieve 50% of sales by 2040, as some analysts now forecast. That'll happen before 2025.
Not all of those cars will be Teslas. But a big chunk of them surely will be. Many of the rest will be electric bubble cars, because being so small and light, they'll need smaller batteries, making them very cheap. Like this one:
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| The Microlino EV (Source) |
By the way, this means batteries for stationary storage will also get cheaper. Musk expects Tesla's battery sales each year for the next several years to equal total sales for all previous years. That's an extraordinary growth rate. I believe it. Musk also said that solar panel and solar roof tile sales were being held back because 74% of rooftop solar customers want storage. As Tesla has a big backlog with the Tesla Powerwall, expanded production will lead to a surge of Tesla solar panel sales too.
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