lango
Member
If one estimated the cost of the pack back in 2013, it likely was somewhere around $230/kWh and Tesla charged customers about $305/kWh. Maybe it was lower, but one would assume their GM would have been much better if it were substantially lower. Since then, commodity prices have plunged and the dollar has gotten much stronger. Since Tesla buys the cells in yen, there is about 25-30% off on the cell portion, the pack assembly costs are likely not all that much different. That leads us to the $185/kWh pricing. Back in 2013/2014, Tesla was talking about the Gigafactory and shaving 30% off the price of batteries. It wasn't clear exactly how that would happen other than consolidating production into one location of the various parts of the cell and achieving scale. I suspect it has to do with energy management, cutting out shipping, and compressing margins with scale. After all, one has to use a lot of energy to just charge and discharge the cells during production so there is always a ready amount of energy storage on site that has to be used. In any case, if the 30% is all process innovation, then we get another 30% on the $185/kWh. There might be savings in the pack integration as part of that, but one would assume that if there were a lot to be saved there, they would have already done it. Maybe just changing to bigger cylindrical cells will make some significant savings. In any case, that's $130/kWh. However, since commodity prices are really low, if those prices go back up somewhat, that will erase some of the 30% drop that has happened ahead of the Gigafactory process improvements. So instead of starting at $185/kWh, a significant rise in nickel, aluminum, cobalt, synthetic graphite, and/or lithium prices could make an impact of the next 2-5 years. So instead of modeling for $130/kWh, I chose to use $150/kWh to counter those arguments that the commodity prices aren't going to stay this low. The point is to make sure that the Model 3 is a viable product without needing to squeeze every last cost improvement on the pack.
At 55 kWh * $150/kWh, we're talking $8,250 for the Model 3 pack.
At 52 kWh * $130/kWh, we're talking $6,760 for the Model 3 pack.
At 60 kWh * $215/kWh, we're talking $12,900 for the Bolt pack.
Now, the Bolt pack pricing is expected to stay the same through 2019 according to GM's graph. We expect that Tesla's cell pricing to continue to improve.
One datapoint that I am interested in is how much commodity raw materials goes into a battery assembly pack. If you assume $20 price increase/KWh following from 50% commodity increase that assumes $40 would be commodity raw material out of the $130 (100% decline would be $40). If you instead assume 100% commodity price increase being $20 that would be $20 per KWh at $130. Knowing this would out a floor on how low battery packs can go.