• Feb 21, 2012
During its recent fourth quarter 2011 financial results Q&A conference call, CEO Elon Musk had, of course, lots to say about Tesla Motors and its various products. One statement though, concerning the falling cost of batteries, spoke to the broader electric vehicle (EV) market and bears repeating. The high price of energy storage is, after all, one of the major barriers to lower EV prices and, consequently, faster consumer adoption.

We've heard in the past different estimates of battery costs. When the first Chevy Volt battery came off the line it was said to be around $500 or $600 per kWh. For its part, the Nissan Leaf pack was reported to be as low as $375 per kWh. Now, two years down the road what is Tesla saying about the price of its batteries?

A participant from JP Morgan asked (in torturous analyst-speak, using "dimension" as a verb) something to the effect of, "Could you speak about how certain you are of a $200-per-kWh battery price and where you see that number going?" Musk began his response by seeming to deny that figure represented the company's current cost but went on to say, "I do think that cost per kilowatt hour (kWh) at the cell level will decline below that, below $200, in the not-too-distant future."

So, how soon is the "not-too-distant future"? Perhaps 2015. That's the year Tesla is now aiming to begin production of its Gen 3 vehicle – what was historically code named "Blue Star." Tesla had originally planned to make the new Roadster after the Model X, but decided it could make a mass-market vehicle with a price tag in the $30,000 range sooner than it had previously thought.

For what it's worth, Elon isn't the only one talking about a significant downward price trend. Makoto Yoda, president of Mitsubishi's battery supplier, GS Yuasa, says that due to mass production, the price of its lithium batteries will soon be a quarter of what it was in 2009.


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  • 82 Comments
      BipDBo
      • 2 Years Ago
      $200 at the cell level. Does anyone have a guess as to what that translates to at the pack level including cooling systems? Economy of scale would also work to the advantage of assembling the packs. It sounds like at price like that, a 5 kwhr pack for a mild plug-in hybrid would cost very little and enable the OEMs to easily meet future CAFE requirements.
        2 Wheeled Menace
        • 2 Years Ago
        @BipDBo
        Yeah, the Tesla batteries would not work in a plug-in hybrid at all. Very low C rate. So you either go big, or you go home with those. That's why Tesla uses such large size packs. For plugin hybrids, you need something like the exploding LG cells ;)... sorta like what i run on my electric bike..
        Dan Frederiksen
        • 2 Years Ago
        @BipDBo
        on a large scale packaging shouldn't add much to the price. no more than 50$/kWh and could probably be much less
        Nick
        • 2 Years Ago
        @BipDBo
        BipDBo You raise a good point. Mild hybrids with small battery packs wouldn't cost more than regular cars, and would benefit the most from the lower battery prices.
        DaveMart
        • 2 Years Ago
        @BipDBo
        Don't mix up the slow cycling batteries used in large BEV packs with the very different packs needed for plug-in hybrids, let alone pure hybrids with their ~1-1.5kwh packs. They have to be capable of far more cycles and much higher power output relative to their pack size. All that costs money.
          2 Wheeled Menace
          • 2 Years Ago
          @DaveMart
          High C rate cells definitely cost more $, are heavier, and the safety factor is often worse. With A123 you get heavier/bigger cells ( ~130wHr/KG, compare that to the >200wHr/KG that Tesla's cells have ), but you get safety. With LG pouch cells, you get slightly better wHr/KG but you lose safety. I forget what Toyota is using but the situation is much the same. I really think this is the Achilles's heel of the plug-in hybrid. Until there is some kind of breakthrough in batteries! You have to trade off high C rate for high capacity right now. I like the Tesla approach very much, why spend extra $ per cell on high discharge cells with a lower capacity? just dump a crap-ton of low discharge stuff in there, and overspec it some so that it is still able to pump out the juice 5-10 years down the line..
          BipDBo
          • 2 Years Ago
          @DaveMart
          Interesting, and good point. I'm sure though, that costs of all lithium battery types would tend to fall together, correct?
          DaveMart
          • 2 Years Ago
          @DaveMart
          Bip: That is why they over-specified it. So you could say that they added around a third of the cost to the battery by having to have a bigger battery than they would otherwise have done. Battery chemistry is improving though, and it is doubtful if a plug in with a 40 mile EV range would use more than 12 kwh or so if designed now. Engineering is all about trade offs though, and if you do 40 miles a say in a plug in then that is 14,600 a year, or 146,000 miles over ten years for the battery cycling 3,650 times, less the surplus GM builds in. A BEV if it has an 80 mile range would have cycled half as often for the same mileage, and what it more would not have deep drained a fraction as often. Its notable that having to keep within the battery technology of the time the ~50% over specification of the Volt for its ~40 mile EV range is around equivalent in terms of cycles to the ~73 range on the EPA of the Volt. IOW, you don't get something for nothing. Other things being equal, the lower performance requirements of a BEV battery mean it is cheaper per kwh than a PHEV.
          DaveMart
          • 2 Years Ago
          @DaveMart
          I can't find a really good link to the relative price of HEVs and PHEVs vs BEV batteries, but this rather old one at least indicates the price per kwh of a 10 mile PHEV being greater than for a 40 mile PHEV: http://ftp.jrc.es/EURdoc/JRC54699_TN.pdf One of the critical factors is that a 15 mile PHEV will have a deep discharge at least once a day, which batteries don't tend to like, whereas it will be relatively rare in a BEV assuming that normal mileage is driven of c.12,000 mile/year. As for hybrids, the number of cycles the Sonata hybrid for instance will have with its c.1.1kwh battery over its life is phenomenal, as its rating by Hyundai at 10 years and 300,000 miles! Of course, we are accustomed to that small miracle from the Prius cars, with their NiMH batteries. It does not seem unreasonable that that sort of performance might cost s bit more.
          DaveMart
          • 2 Years Ago
          @DaveMart
          Hmmm. I find I can't substantiate my comment that they are prismatic - that was the NiMH battery in the Prius, I don't know what they are using in the plug in. However, whilst looking I came upon this: http://www.toyota.com/upcoming-vehicles/prius-plug-in/technology.html So they need 150kg for the 5.2kwh of the Prius plug in battery! The 24kwh battery in the Leaf only weighs twice as much. That's only around 35Wh/kg, quite a difference from the densities of Panasonic's top energy density versions. I'll take a wild guess that the cost of the battery is not too far from proportionate to its weight, so the battery in the Prius PHEV may be not far off half as costly as that in the Leaf.
          2 Wheeled Menace
          • 2 Years Ago
          @DaveMart
          Hmm.. Toyota's Panasonic cells must be vastly different than the 18650's. Prismatic is a strange format that seems rarely used as well. p.s. the main reason that Chevy is only using about 1/2 the battery capacity of the LG cells is because they want the battery to last a really long time. A lithium battery used at 50-60% SOC will often have cycle lifes in the 10,000's, an exponential improvement over 90-100% SOC, where you usually see cycle life in the low 1000's. 40 miles x 1000 cycles is 40,000 miles.. that isn't much.. that's why they waste some of the battery capacity & stretch it out.. i don't like this approach because it increases the cost with no benefit to the user.. think about what Tesla's doing.. they have a cell that i believe is rated for only 500 cycles. But 500 cycles at 300 miles each cycle is 150,000 miles. By then, there will be some awesome batteries out and you won't mind a dead pack after 10+ years.. :)
          DaveMart
          • 2 Years Ago
          @DaveMart
          BipDBo: Not AFAIK. The cost of the better performance is heavy with present technology I believe. 2WM who specifies lithium batteries for cycling use might be able to give you a better idea, although of course that is at retail level and not specified for cars.
          DaveMart
          • 2 Years Ago
          @DaveMart
          Thanks for that, 2WM. Toyota use Panasonic. I am not sure what the specs are for their prismatic batteries as opposed to their 18650's. One thing to be borne in mind is that higher costs for better C-rates are not, again AFAIK and that is indeed limited, not inherently more expensive than low C-rate batteries. It is just that our technology is relatively immature at the moment. That is handy as that makes very high charging rates possible. Otherwise fast charge would be very limited..
          BipDBo
          • 2 Years Ago
          @DaveMart
          I don't know much about battery chemisty. Would such cells be appropriate in something like the Volt where you have 16 kwhr discharging only down to around 1/3 charge for 40 miles?
      electronx16
      • 2 Years Ago
      Since Tesla's battery packs are already retailing at $400/KW is seems reasonable to expect their current cost to be somewhere between $200-$300 already, a far cry from the $600-$1200 range many research bureaus reported battery prices to be only a few years ago while expressing their expectations that it would drop by only a few percent per year. $200 is ta good number. You know the ICE age is over when a battery comes up with all specs starting with the number 2: $200/KWH 2000+ cycle life 200WH/KG energy density at the pack level 2 minutes/50% recharge time (Okay, that last one may be a bit over the top)
        2 Wheeled Menace
        • 2 Years Ago
        @electronx16
        Ha @ the idea of breaking up the battery.. Just use a bigger quick charger. The only limit is the grid at the end of the plug.
        Ryan
        • 2 Years Ago
        @electronx16
        20 minutes/50% recharge that would get you 100 miles. And that is with a car that can do 200W/mile (EV1 could). That would be a lot of amps... The only way to do it is to break apart the battery bank into lots of 12V or 48V packs and have multiple quick chargers.
        Timo
        • 2 Years Ago
        @electronx16
        Last one isn't far fetched. There are techs that put batteries over 60C which means *full* charge in just one minute. 50% in two is slow pace for them. It just takes nuclear plant directly attached to battery to actually do that if battery is any useful size... Panasonic 3.4Ah batteries have already exceeded that 200Wh/kg in gravimetric energy density. their silicon-based 4Ah batteries are actually a bit worse because they weight more but they have even higher volumetric energy density. Batteries that have been developed in labs show far, far better energy densities so it should not take long to get $200/kWh price tag just because it takes so few batteries to reach that.
      • 2 Years Ago
      He also said that the actual Tesla cost is a closely guarded propitiatory secret (Tesla has never Publicly said what their cost per kw hour is.) so Tesla's cost could already be below that.
        Dan Frederiksen
        • 2 Years Ago
        I believe Martin Eberhard initially said the roadster pack cells cost 20k$
          • 2 Years Ago
          @Dan Frederiksen
          Martin Eberhard hasn't been with Tesla since 2007. The cost of batteries drops at about 8% a year. What Martin Eberhard said cannot be takes as relevant in 2012 unless you do the math to figure out the difference in cost. Also that was the cost of the pack. This article is referring to the cost of the cell. Elon musk pointed out that there's also cost at the pack level in the fourth quarter 2011 financial results Q&A conference call, Which I also listened too.
      Timo
      • 2 Years Ago
      Does anyone have any news about DBM Energy's Kolibri batteries? That was supposed to be 90% cheaper / kWh than anything currently available. Was it hoax or have they just been quiet about it? If even half of what they claim was true that $200/kWh has been already broken.
      Grendal
      • 2 Years Ago
      A Leaf has a 24kWh pack and gets roughly 75 miles out of it. The Model S has an 83 kWh pack and gets 300 miles out of it. Using those as examples then it seems that, with general use, you can get 3-4 miles per kWh. Using those numbers I'd predict that EV's will overtake ICE cars when battery prices reach $50-$75 per kWh. Exotic/Niche ultralight hyper-efficient vehicles like Aptera, Edison 2's VLC, or the Dan-mobile generally get 8-10 miles per kWh. $200 per kWh is still an exciting positive step.
        JP
        • 2 Years Ago
        @Grendal
        Batteries may never get to $50-$70 per kWh, nor do they need to. EV's can cost more than ICE vehicles and still compete since their fuel costs are so much lower.
        Dan Frederiksen
        • 2 Years Ago
        @Grendal
        Grendal, even in a conventionally engineered car, at 200$/Wh 24kWh is 4800 plus say 1000 for motor and power electronics. subtract say 2500$ for the equivalent ICE junk, motor, exhaust battery, starter motor and alternator etc, that's about a 3500$ premium for electric cars. if people then save the rising price of gasoline don't you think that can defeat gas cars?
          Grendal
          • 2 Years Ago
          @Dan Frederiksen
          I would like to think that, because it is more efficient, that it would defeat the stranglehold ICE's have over the market. But human behavior tells me that people don't like change. That's why, in my opinion, an electric car will need to be more convenient and noticably more cost effective than its ICE alternative. I understand your gas vs. electricity point and personally agree with it but that's too esoteric and intellectual a concept for the mass market to grasp. It's the same issue with aerodynamics and lightweight materials. Aerodynamic designs don't look like what a consumer thinks a car should look like and lightweight materials are obviously unsafe (even if they aren't). $200 per kWh will be the tipping point where more people will start trying the new technology but $50-$75 is where the general public will truly be joining the revolution.
        Joeviocoe
        • 2 Years Ago
        @Grendal
        " I'd predict that EV's will overtake ICE cars when battery prices reach $50-$75 per kWh." That's a pretty low estimate. I would say $150 - $300 would make total cost of ownership on Par with ICE
        Grendal
        • 2 Years Ago
        @Grendal
        I did say "overtake." The Model S is equal to it's ICE equivalent if it lives up to it's expectations - which I expect it will. The Leaf is just a little more expensive than it's ICE equivalent over the life of the vehicle, if its battery pack stands the test of time. An electric car will need to be better (more perceived value) than it's ICE equivalent for the mass market to make the transition. I expect it will happen in a big way when the EV's are priced the same as an ICE car, 150-200 mile range, same for same, size and comfort level. Don't you think?
      Anderlan
      • 2 Years Ago
      $500 or $600/kwh? Where is my 30 mile range 50mph 2 seat runabout for $7000? What's the hold up on the Streetscooter? Why is the reported build cost of every awesome home made EV runabout or EV conversion I see always "$2500" or "5000" while I can't buy something except at 5 times the price? Why is the awesomely original Renault Twizy so expensive: $10k PLUS $65/month battery LEASE (and why isn't it in the US yet)? Can we get some expertise together and execute the mass production of some runabouts priced not only to sell, but to disrupt the market with the creation of an ubiquitous new category of vehicle?!?
      Spec
      • 2 Years Ago
      Somebody really needs to make the small aerodynamic EV. Perhaps a 2 seater. With a 20KWH battery in it. That should get 100 miles of range if light & aerodynamic enough. If you paid $3.2K for the cells, you should be able to build it for less than $27,500. That would put it at less than $20K post tax-credit. That would be a nice zero gasoline commuter vehicle. People could keep their existing car for long drives and use such a commuter vehicle 5 days a week to get back & forth from work without paying a penny for gasoline. The savings in gasoline alone could pay for the car over its lifetime (assume 12 years life or so.)
        EZEE
        • 2 Years Ago
        @Spec
        You want it aero? And cheap? Meanwhile, Dan stands on top of a mountain, window blowing through his hair at 200mph....nodding....all of his plans are coming to fruition....
          Grendal
          • 2 Years Ago
          @EZEE
          Dan has cited the Aptera as one of his inspirations for the Dan-mobile and his obsession with vehicles being lightweight and aerodynamic. I don't fault him for that obsession - I would love to own and drive an Aptera. I only disagree with Dan's vehemence that everyone should be driving a lightweight aerdynamic car no matter what. Though, in some ways, I'm glad someone is standing at the top of the mountain shouting at the world. ;)
        Grendal
        • 2 Years Ago
        @Spec
        They did. It was called the Aptera. It could still be built. They're selling the designs and other intellectual property... It probably won't be as big as it could have been in 2008 before the CEO sunk the company. You probably could have gotten 100 miles on a 12-15 kWh pack. They did get 100 miles on a 10 kWh pack but that was an early prototype.
          Spec
          • 2 Years Ago
          @Grendal
          Personally, I liked the Aptera but it was too freakish for the mass market. And without mass market sales, you can't drive down the costs. The trick is to design a car that is very aerodynamic & light AND STILL appeals to the mass market.
          Timo
          • 2 Years Ago
          @Grendal
          Aptera was not small. It had external dimensions of Hummer. There are far more aerodynamic and smaller concepts out there. One being electric version of Persu three-wheeler. http://www.persumobility.com/faq.html Aptera had very low Cd, but it had too big frontal area. As a result it was not any more aerodynamic than GM EV1. Persu concept is tandem two-seater making frontal area a lot smaller. If you drop frontal area to third of normal car it doesn't need to be extra super aerodynamic and it still is more aerodynamic than any normal car. I don't know if Persu manages to make its vehicles popular, but sooner or later someone does get that done right.
        EZEE
        • 2 Years Ago
        @Spec
        You want it aero? And cheap? Meanwhile, Dan stands on top of a mountain, window blowing through his hair at 200mph....nodding....all of his plans are coming to fruition....
      spw
      • 2 Years Ago
      50KWh x $200 = $10k... and thats just cell price. $15k for the complete powertrain seems 8-10x more than current 30k cars, right?
        Nick
        • 2 Years Ago
        @spw
        spw Yeah, price should ideally be lower, about $100 to $120 per Kwh. That would be greeeat.
        paulwesterberg
        • 2 Years Ago
        @spw
        Tesla's largest battery pack(300miles! of range) is 85kWh. 85 * 200 = $17,000 which means the entire drive train would cost would be 25k+ which would still leave tesla 25k to spend on the chassis and include a healthy profit when they sell it for $100k+. So my guess is that tesla is already at 200 per kWh or they will be within the year as Model S production ramps up.
          Grendal
          • 2 Years Ago
          @paulwesterberg
          Tesla worked out a package deal with Panasonic for the Model S to the tune of 80,000 battery packs over 4 years. It's possible that there is a tiered price scale involved in the deal but I would doubt it. I'd guess they did a fixed price for the entire run and using your numbers somewhere between $225-$275 per kWh. Tesla might need to work a seperate deal for the Model X. And I'd bet that there will definitely be a new completely seperate deal for the Bluestar that will be $200 or less.
        paulwesterberg
        • 2 Years Ago
        @spw
        Also for your standard commuter vehicle where 100 miles of range would suffice you would only need 30kWh to provide a reliable(epa) 100 miles of range. And you could easily make due with just 25kWh if you made areodyanmics and light weight construction your primary design goals. So if you could put the entire drivetrain together for 7-8k you could sell the vehicle at normal car prices. Saving $200 per month on gas will convince a lot of people that 100 miles of daily range is enough.
          Dan Frederiksen
          • 2 Years Ago
          @paulwesterberg
          and if you improved weight and aero you'd only need half of that
          EZEE
          • 2 Years Ago
          @paulwesterberg
          @dan :)
          Dave D
          • 2 Years Ago
          @paulwesterberg
          "And you could easily make due with just 25kWh if you made areodyanmics and light weight construction your primary design goals." Check it out, Paul is channeling his inner Dan! :-) And actually, I agree.
        • 2 Years Ago
        @spw
        They aren't going to put a 50kWh battery on their $30k base model. Heck, even their base Model S, which starts at around $60k, only comes with a 40kWh battery. 40kWh pushes the cost down to $8k, 35kWh (~140mi 55mph range, ~105mi EPA) is $7k, 30kWh (~120mi 55mph range, ~90mi EPA) is $6k, etc. And note he is saying below $200/kWh, not exactly $200/kWh.
      Maynex
      • 2 Years Ago
      Maynex recently developed a new Hydrogen battery technology that will make any EV go over 1000 miles and recharge in a minute! The battery work with Maynex H2-Flex, a device that convert dirty water into gas through chemical reaction between aluminum alloy and water.
        Pandabear
        • 2 Years Ago
        @Maynex
        the amount of energy to drive 1000 miles, delivered by household voltage (assume 240V), in a minute means HUGE current. You will melt all the power line along the way and knock out the power in your neighborhood. I highly doubt that is possible. Reading into the detail is your friend.
        Grendal
        • 2 Years Ago
        @Maynex
        Sorry, the conservation of energy says that what you're saying isn't possible. Unless the recharge is from a lightning bolt/nuclear reactor. And you're saying that you can convert dirty water into gasoline? Good luck.
        Sean
        • 2 Years Ago
        @Maynex
        This is not fundamentally impossible. Aluminum is fairly energy dense (I think significantly more so than gasoline). You are talking about using aluminum to strip the oxygen out of water, releasing hydrogen (basically burning the aluminum). You could recharge it quickly by swapping out the oxidized aluminum for non-oxidized aluminum. This strikes me as impractical but you cannot dismiss it as violating the laws of physics.
        Dave D
        • 2 Years Ago
        @Maynex
        Don't come on here advertising your bullshit scams you *******.
        Arun Murali
        • 2 Years Ago
        @Maynex
        Aluminum and some carbonates or lime paste in water will release Hydrogen. Its actually just school chemistry. Not really sure if I am ready to buy a tonne of Aluminum to fuel my car. I think mining a litre of petrol is a lot cleaner.
      Dave R
      • 2 Years Ago
      Wow - I totally read the GS Yasua news wrong when I saw it the other day. http://www.greencarcongress.com/2012/02/gsyuasa-20120219.html I read it as a 25% decrease (not as good as I hoped), not a 75% decrease which is very good news indeed! Once prices get to $100/kWh we should really see plug-ins start taking off. In the mean time, early adopters and high gas prices will keep the industry moving.
        goodoldgorr
        • 2 Years Ago
        @Dave R
        Stop promoting high gas prices. Politicians are starting to promote gas at $2.50 to $2.00 a gallon.
          Ford Future
          • 2 Years Ago
          @goodoldgorr
          Speculators are storing gas in tankers, now at an all time high, of 19 known tankers. The Price of Gas is now determined by Speculation in the market.
          Spec
          • 2 Years Ago
          @goodoldgorr
          Politicians are spewing desperate lies in a pathetic attempt to get votes. They are lies. Gas is not going to $2.50/gallon unless there is another financial meltdown.
          wardialer
          • 2 Years Ago
          @goodoldgorr
          pretty crazy that oil/gasoline have become a store of value. that kind of prestige was usually reserved for gold. but w/ governments printing money, its only a matter of time before hyperinflation renders currency useless.
          Nick
          • 2 Years Ago
          @goodoldgorr
          fordinsight That's correct. As an example, the Koch crooks made...wait for it....$40 BILLION in a matter of a few years between 2005 and 2009, by speculating on the price of oil, which they're naturally able to influence since they're an important player in the oil supply.
      dondonel
      • 2 Years Ago
      Really now, fast charging is the only thing missing for wide-spread adoption.
        • 2 Years Ago
        @dondonel
        How's 45 min. So with the Model X SUV from Tesla the choice is 45min with the Tesla Super Charger and $5 dollars cost or a gas SUV at 5 min and $100 dollars. I choose 45 min a hundreds on dollars in my pocket.
          PR
          • 2 Years Ago
          Ashton, Taking 45 minute lunch and dinner breaks after each 3-4 hours of driving isn't that big a deal for the vast majority of US drivers. If you've got kids, even that kind of schedule is pushing the bounds of sanity. That would give road warriors setting off in the morning with a full battery around 9-12 hours of driving in a day before stopping at a hotel for the night. Frankly, if you spend too much more time on the road than that in the day, with any less rest, you are a hazard to the general public and I'm glad the limitations of the car would force you off the road.
          Grendal
          • 2 Years Ago
          @Ashton I think you're underestimating people's ability to change. I think 45 minutes is within reason to change someones behavior. Charging stations will go in places like malls, grocery stores, restaurants, and just about anywhere else people stop during the day. A 30 minute stop at a grocery store will always generate a quick charge. Long trips will take stops into account because the local convenience will outweigh the convenience of a 5 minute gas fill up on a old fashioned long distance trip.
          Dan Frederiksen
          • 2 Years Ago
          a 200km A123 pack can charge 80km in 6 minutes. the technology is here, just waiting for dullwitted humans to implement it.
          Nick
          • 2 Years Ago
          Or, you could just plug it in at night when rates are even lower....and not even have to worry about time.
          Ashton
          • 2 Years Ago
          I get your point. But 45 minutes is still too long for the masses to adopt, it needs to be at most 15, preferably 5-10 minutes.
      super390
      • 2 Years Ago
      $300 / kwh in the 1998 Solectria Sunrise sedan (~100 wh/mile) would have meant $30 per mile of range for the battery, unless you were trying to go 70 mph on the Interstate.
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