No Model III until 2019?

[anticitizen13.7]

the new genesis is a great car. so is the new sonata.

you're a couple years out of date, mate.

I forgot that the Sonata had its Full Model Change about 6 months ago... so I stand corrected that they did remedy the chassis problems that plagued the previous generation. I still can't stand Hyundai, based on their past history of cheating on MPG figures.

- - - Updated - - -

Again, the "problem" for Tesla is not the Bolt, but various other large car companies using similar battery packs from LG, Samsung and Panasonic. GM was just the first to showcase its entry, many others will follow.

Look, if you have some info on this, either post some links, or type up what you know. Do you really know something, or are you just making this up for the lulz? If you want to be taken seriously, do something to prove yourself credible.

 

[tftf]

Look, if you have some info on this, either post some links, or type up what you know. Do you really know something, or are you just making this up for the lulz? If you want to be taken seriously, do something to prove yourself credible.

I posted a few links in earlier posts about various battery supply agreements and related topics. I certainly won't translate various Asian or German sources, that's where much more info is available, because much of it is behind paywalls or from conferences (and especially not when you ask in this tone).

If you believe Tesla has no real competition (i.e. all other car makers are close to clueless) and the Model 3 is out on time by 2017 and supported by a unique charging network and Gigafactory, there's no reason to worry or search for this information anyway.

 

[SteveG3]

TFTF, I looked at the link you shared as the basis of your claim that LG Chem has multi-billion dollar contracts (which you shared to suggest that the Model 3 will face a crowded field of 200+ mile BEVs in 2018).

Sure enough the article says LG Chem has contracts with six automakers, and that $10 billion number is indeed in there... but you'll note, that $10 billion represents "accumulated sales revenue... by 2018" (comment and link at end of this post). Sounds to me like this $10 billion is probably LG Chem automotive battery revenue all time through 2018. If that's the case, I'd estimate of that $10 billion in revenues accumulated through 2018, roughly $3 billion of it would be in 2018 itself.

So how many BEVs might we see from LG Chem ringing up $3 billion in vehicle battery sales in a year?

First, to make things simple, I looked at the highest possible long range BEV volume scenario for LG Chem's partners. We know this wont happen, but if these six companies use none of the batteries for hybrids and plug-in hybrids, so all of the batteries they buy from LG Chem will be for 200+ mile BEVs, and we assume on average they need 50 kWh packs, and LG Chem charges $300 kWh, that only makes for 200,000 total such BEVs. If all those competitors combined put out a combined 200K BEVs I don't see that having any impact on Tesla's sales volumes. Of course, we know, not all those batteries will go to BEVs... plenty will go to regular hybrids and plug-in hybrids.

So, I also looked at what that mix of hybrids, plug-in hybrids and BEVs bringing in $3 billion in estimated 2018 revenue might be. Here's one scenario: (I'm sure others have a more accurate sense of the size batteries in hybrids and plug-in hybrids, etc, and what LG Chem may charge per kWh):

assuming the average hybrid has a 1 kWh battery, the average plug-in hybrid a 10 kWh battery, and the average competing BEV a 35 kWh pack (split between 80 mile city EVs and something like the Bolt), and LG Chem charges $300 per kWh on average, the $3 billion I estimated could be based on 2.4 million hybrids, 650K plug-in hybrids, and 30K BEVs. Given that LG Chem has contracts with six companies, this could be basically 400K hybrids for each manufacturer, 108K plug-in hybrids for each... and among those six manufacturers 30K BEVs split between short and long range vehicles. Obviously, this is just a hypothetical I made up, but the point is there are volumes of hybrids and plug-in hybrids that seem reasonable for 2018 that bring the already insignificant 200K competing BEVs of an all BEV scenario to a completely irrelevant 30K BEVs in a hybrid, plug-in hybrid BEV scenario.

Bottom line: your citing of LG Chem contracts doesn't seem to be any kind of an indication of trouble for Tesla and the Model 3.

"LG Chem, which has supply contracts with six out of ten final automobile manufacturing groups, is expected to score accumulated sales revenue of over 10 trillion won (US$9.7 billion) in the battery sector by 2018"

http://www.businesskorea.co.kr/article/5994/another-achievement-lg-chem-supply-electronic-automobile-batteries-audi

 

[tftf]

You forgot to quote my second source (Samsung.BMW), that's a single supplier contract over billions of EUR for just one OEM:

BMW to spend billions buying Samsung SDI Batteries

BMW approves spending billions on Samsung SDI batteries as it looks to the future and increases production of electric vehicles

Video: BMW to spend billions buying Samsung SDI Batteries - Telegraph

Yes, the smaller contracts from LG - for example with Audi: Green Car Congress: LG Chem says it has won a major Li-ion battery contract from Audi are only about "hundreds of millions" (of USD) because these only covers plugins and hybrids for now. But VW Group (to stick with the Audi example) also has Panasonic and possibly in-house sourcing for additional supplies in the future.

The BEV cell supply contracts are/will be in the multi-billion USD size, as the BMW example shows.

And as I noted in an earlier link, it's doubtful that major additional economies of scale apply to battery plants beyond a certain size:

Green Car Congress: CMU/MIT study finds large-scale battery manufacturing will do little to reduce unit costs past a 200-300 MWh annual production level

OEMs could well decide to build regional battery plants in Asia, Europa and America.

Just because Tesla bulds one giant factory doesn't mean this is the only or best possible approach - especially since battery technology keeps progressing.

 

[JRP3]

The size of a battery plant has no impact on the ability to adjust for technological advances. This is simply a myth that certain people keep trying to perpetuate. If you have one large factory or 5 smaller factories the ability to adjust or change the equipment contained therein is no different. It's not as if the actual factory must be torn down and rebuilt.

 

[techmaven]

The BEV cell supply contracts are/will be in the multi-billion USD size, as the BMW example shows.

Yup. They have to be. Just the plug-in hybrid market for BMW through 2020 will require billions of euros of batteries. As part of this past summer's announcements, BMW's statements did not include the time period for the multi-billions of euros agreement, but did say that they were going to increase the i series battery purchases by 25-30%. Most reports discuss the plug-in hybrid market through 2020 with 7% of the market.

For 2014, the i-series, using 15,000 vehicles x 19 kWh (optimistically throwing in i8's with smaller batteries but counting them as i3's) was about 0.285 GWh. At a 30% increase, BMW is looking at 20,000 vehicles with about 0.370 GWh per year, or about 80-100 million euros for 2015.

At 7% of BMW's sales, plug-in hybrid alone will be about 0.5 billion euros per year. So it won't take long to be multi-billions of euros.

In contrast, Tesla is bought around 2.6 GWh of batteries in 2014 or around $500 million USD. In 2015, this is likely to be a billion USD. Even at that purchase level, Tesla had to kick in money to accelerate the production of batteries. So on the same terms, the Tesla/Panasonic relationship is already in the billions of dollars or euros on an acquisition basis.

In order to build a 200 mile BEV, you need roughly 55 kWh of batteries on board and if you can get them at $200/kWh, it will be about $1.1 billion USD per 100,000 cars. That's 5.5 GWh of annual production. Tesla's average capacity per car is about 40% higher.

If you take all that together, the Samsung SDI/BMW relationship is a modest one in comparison to what Tesla/Panasonic is cooking up. It's not merely multi-billions over some unspecified period of years. It's billions now. You have to spend billions to make the battery plants right now. You have to spend a billion on the batteries right now.

And as I noted in an earlier link, it's doubtful that major additional economies of scale apply to battery plants beyond a certain size:

Green Car Congress: CMU/MIT study finds large-scale battery manufacturing will do little to reduce unit costs past a 200-300 MWh annual production level

OEMs could well decide to build regional battery plants in Asia, Europa and America.

Just because Tesla bulds one giant factory doesn't mean this is the only or best possible approach - especially since battery technology keeps progressing.

I've read through this paper when this was presented as evidence that the Gigafactory won't save costs. It doesn't say what you think it says. Primarily, it doesn't actually address any supply chain efficiency gains. Further, their methodology is definitely suspect, as it really doesn't look at manufacturing per se. Nothing OR related in a factory is really in that paper. It would be wrong to apply it directly to the real world of the Gigafactory.

 

[anticitizen13.7]

I certainly won't translate various Asian or German sources, that's where much more info is available, because much of it is behind paywalls or from conferences (and especially not when you ask in this tone).

I'll leave the contracts discussion to others since there are plenty of people address it already.

Keep in mind that saying "X information is out there but it is hidden from you" is not convincing. Car companies generally like to brag, show off concepts, and make themselves look great. I'm skeptical that the companies with the most to lose would not publicize EV plans for 2017-2018.

Until I see announcement to the contrary from car companies, I'm not convinced that a bunch of Model 3 competitors will suddenly show up in 2-3 years.

 

[stopcrazypp]

Obviously, this is just a hypothetical I made up, but the point is there are volumes of hybrids and plug-in hybrids that seem reasonable for 2018 that bring the already insignificant 200K competing BEVs of an all BEV scenario to a completely irrelevant 30K BEVs in a hybrid, plug-in hybrid BEV scenario.

This fits with the LG road map I have posted where a vast majority of contracts are for PHEVs and hybrids. The only two OEMs where we have confidence will likely use LG's "200 mile" cells is GM (many, many rumors even before the Bolt unveil) and Renault (signed an MOU to work with LG on this). The rest have only signed contracts for PHEVs and hybrids. They are large contracts in the hundreds of million, but the critical thing is they aren't contracts that uses this new chemistry nor are they for BEVs.
http://www.autoblog.com/2014/05/27/renault-lg-partner-up-for-180-mile-ev-battery-tech/

As for the Samsung SDI / BMW, they already said they won't have something ready in this space until 2019 (and BMW's strategy for the next 5 years is more PHEVs). So the claim that Tesla will be releasing the Model 3 with 5-10 competitors on the market simply doesn't check out given the information we know so far. Unless tftf has some insider information we are not privy to, there is not much support for his claim that this will happen.
http://insideevs.com/samsung-sdi-from-130-whkg-to-250-whkg-by-2019-and-300-whkg-in-≈2020/

 

[SteveG3]

You forgot to quote my second source (Samsung.BMW), that's a single supplier contract over billions of EUR for just one OEM:



Video: BMW to spend billions buying Samsung SDI Batteries - Telegraph

Yes, the smaller contracts from LG - for example with Audi: Green Car Congress: LG Chem says it has won a major Li-ion battery contract from Audi are only about "hundreds of millions" (of USD) because these only covers plugins and hybrids for now. But VW Group (to stick with the Audi example) also has Panasonic and possibly in-house sourcing for additional supplies in the future.

The BEV cell supply contracts are/will be in the multi-billion USD size, as the BMW example shows.

And as I noted in an earlier link, it's doubtful that major additional economies of scale apply to battery plants beyond a certain size:

Green Car Congress: CMU/MIT study finds large-scale battery manufacturing will do little to reduce unit costs past a 200-300 MWh annual production level

OEMs could well decide to build regional battery plants in Asia, Europa and America.

Just because Tesla bulds one giant factory doesn't mean this is the only or best possible approach - especially since battery technology keeps progressing.

Okay, so I take your asking me to look at the second link about Samsung's contract with BMW as your acknowledging that the first link about LG Chem contracts is not at all indicative of all six of the automakers LG is supplying to combined delivering long range BEVs at volumes that will effect Tesla.

As far as the Samsung/BMW link you pointed me to. Second paragraph,

"BMW is planning to increase its purchases of SDI battery cells for the electric i3 city car and the plug-in hybrid i8 sports car as well as for “additional hybrid models” in the coming years, the Munich-based carmaker said today in a statement. BMW assembles the cells into batteries at a facility in Dingolfing, Germany."

Okay, so from BMW, apparently that contract is for hybrids, plug-in hybrids, and the 85 mile i3 (which is consistent with everything we've heard from BMW, that is, their electrification strategy is centered on the plug-in hybrid route).

So, neither of the links to billion dollar battery contracts you've shared here suggest volumes of long range EVs from other brands in 2018 that will impact Tesla.

TFTF... let's make this simple, could you estimate how many long range EVs under $50K you think all the other automakers combined will produce in 2018? (fwiw, I'd agree with you that it makes sense to look at 2018 as the timeframe that the first volume Model 3s get delivered. it will be a nice surprise to me if Tesla shows this to be too conservative).

 

[strider]

Since it's not likely to have aluminum body panels repair costs will automatically be lower.

Why do you think that? All of Tesla's manufacturing experience and equipment are in stamping aluminum. The learning curve for steel would be steep (Remember all the drama about misaligned Model S panels? They'd have to go through all of that again.). Also, in order to meet CAFE requirements, aluminum is becoming common on cars all across the market range. Heck the freaking Ford F-150 is aluminum now. So it's the body shops that will have to adapt to aluminum and not the other way around. It would be interesting to know if repair costs for new F-150's are significantly higher than the older ones.

 

[JRP3]

Why do you think that?

Because Tesla said so:

Porritt says that Gen 3 will use “appropriate materials” to keep its price in check, meaning that expensive aluminum may be mostly out the door:
“I expect there will be very little carry-over. We’ve got to be cost-effective. We can’t use aluminum for all the components.”

http://insideevs.com/cut-costs-tesla-gen-3-wont-aluminum-like-model-s/

 

[dsm363]

Couldn't they do some or most of the panels in aluminum but the frame or other major parts in something cheaper?

 

[stopcrazypp]

Couldn't they do some or most of the panels in aluminum but the frame or other major parts in something cheaper?

Quite possible. That doesn't contradict with the statement quoted. Steel frame and aluminum body is certainly still a possibility.

 

[strider]

Because Tesla said so:
http://insideevs.com/cut-costs-tesla-gen-3-wont-aluminum-like-model-s/

Thanks for the link! So wow. They don't have a prayer of getting this thing out before 2019 if they are going to make anything other than a 30% smaller Model S. Good thing my Roadster is still running great.

 

[wart]

Aluminum chassis and plastic or composite body panels? The insideevs link doesn't rule out such a possibility. Bolt-on composite body panels would probably save weight vs. steel and might not be terribly expensive depending on what fiber reinforcement is used (glass, Kevlar, graphite, different materials in different places as appropriate). A plastic frunk lid would probably solve the "frunk dent" problem too. Also could be easier to replace for crash damage.

I think one of the main drawbacks of plastic body panels in the past has been that they often have larger panel gaps (like the early Saturns) which creates a perception of low quality. Some kind of composite would be better.

Before you say "there's no deal with BMW" note that there are other groups working on low-cost carbon fiber auto parts.

 

[JRP3]

Thanks for the link! So wow. They don't have a prayer of getting this thing out before 2019 if they are going to make anything other than a 30% smaller Model S.

They have never said it would be a 30% smaller Model S, the figure used was 20%, and they've said it's not going to just be a smaller Model S. Most recently Elon has said it won't look like any other car. Not sure why you think using less aluminum means the car is delayed another two years.

 

[aronth5]

Why do you think that? All of Tesla's manufacturing experience and equipment are in stamping aluminum. The learning curve for steel would be steep (Remember all the drama about misaligned Model S panels? They'd have to go through all of that again.). Also, in order to meet CAFE requirements, aluminum is becoming common on cars all across the market range. Heck the freaking Ford F-150 is aluminum now. So it's the body shops that will have to adapt to aluminum and not the other way around. It would be interesting to know if repair costs for new F-150's are significantly higher than the older ones.

This is one reason many believe there will be less aluminum in the Model 3.
Third-Generation Tesla Won’t Be Made of Aluminum, Says Tesla VP of Engineering

https://transportevolved.com/2014/07/01/third-generation-tesla-wont-made-aluminum-says-tesla-vp-engineering/[/QUOTE]

 

[igotzzoom]

I recently folded and bought my first car, as I can't wait until 2019/2020 to have a car. Bought a used 2013 Hyundai Sonata, will drive it until GenIII becomes a reality.

I plan on holding on to my 2011 Sonata until the Model 3 comes out.

 

[Trev Page]

I have a 2011 Kia Sportage and waiting for Model 3. If it doesn't happen in 2017 I might buy a used Model S instead

 

[tdelta1000]

I may be late on this but the TM mantra is to under promise but over deliver. EM said the first images of the 3 will be seen in '16 and no time earlier because '15 is the year of "X". I think that TM already has several designs in the tank. Now that TM will have two models in the wild, I think it will be easier and quicker to manufacture the 3. I say "3" will be the number for '17.