Okay, so we all have heard Elon say a number of times that the cost of the battery will decrease by 30% due purely to the economics of scale / logistics by constructing the gigafactory (reference 3Q 2014 conference call):
Elon Musk: Yes, to be precise about our prediction was that we felt comfortable with at least a 30% improvement in cost or reduction in cost just based on the location and economies of scale. That's without taking any technology improvements into account and we will certainly do technology improvements. If we can't get to 30% even without technology improvements, somebody should shoot us because that would be in complete defiance of economies of scale and obvious cost savings.
Then, in the other corner, we have JB Straubel saying that the chemistry improvements to the battery will give the Model 3 20-30% improvement in energy density over the Model S. This is not the same 30% that Elon is talking about....this is chemistry improvements. Reference around the 16:00 mark.
http://insideevs.com/tesla-cto-jb-straubel-discusses-electric-cars-video/
He has stated this before, in Sept. of 2013. The reference is below the comments:
Tesla Chief Technical Officer JB Straubel says the company's battery costs are half or even a quarter of the price of the industry average, partly because of the company's strategy to use thousands of commodity battery casings rather than the specialized batteries that GM and Nissan use.
"The battery prices in the Model S are substantially lower than what everyone expects today," he said in an interview. Mr. Straubel expects the energy density in Tesla's batteries will increase by more than 20% by the time Tesla's mass-market car comes out in about four years. More energy in batteries should equate to longer driving range for roughly the same price.
http://www.wsj.com/articles/SB10001424127887323981304579079492902482638
My point is this: We are looking at around a 50% cost reduction for the battery packs in 2-4 years. That's absolutely a game-changer, and will create an even bigger moat for the competition to cross.
Elon Musk: Yes, to be precise about our prediction was that we felt comfortable with at least a 30% improvement in cost or reduction in cost just based on the location and economies of scale. That's without taking any technology improvements into account and we will certainly do technology improvements. If we can't get to 30% even without technology improvements, somebody should shoot us because that would be in complete defiance of economies of scale and obvious cost savings.
Then, in the other corner, we have JB Straubel saying that the chemistry improvements to the battery will give the Model 3 20-30% improvement in energy density over the Model S. This is not the same 30% that Elon is talking about....this is chemistry improvements. Reference around the 16:00 mark.
http://insideevs.com/tesla-cto-jb-straubel-discusses-electric-cars-video/
He has stated this before, in Sept. of 2013. The reference is below the comments:
Tesla Chief Technical Officer JB Straubel says the company's battery costs are half or even a quarter of the price of the industry average, partly because of the company's strategy to use thousands of commodity battery casings rather than the specialized batteries that GM and Nissan use.
"The battery prices in the Model S are substantially lower than what everyone expects today," he said in an interview. Mr. Straubel expects the energy density in Tesla's batteries will increase by more than 20% by the time Tesla's mass-market car comes out in about four years. More energy in batteries should equate to longer driving range for roughly the same price.
http://www.wsj.com/articles/SB10001424127887323981304579079492902482638
My point is this: We are looking at around a 50% cost reduction for the battery packs in 2-4 years. That's absolutely a game-changer, and will create an even bigger moat for the competition to cross.