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Published on May 12th, 2014 | by Christopher DeMorro

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Tesla Gigafactory Could Help Your Car Last For Decades

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May 12th, 2014 by
 

Originally published on Gas2.

tesla-snow-2

Imagine if the next new car you bought lasted the rest of your life? The Tesla Gigafactory could make that possible, selling new batteries to old Teslas. This could have an even more profound impact on the auto industry than Tesla’s direct sales model, keeping cars on the road for decades instead of years.

Elon Musk sure seems to be in a hurry to get the Gigafactory going, perhaps even breaking ground on two locations at once, just to make sure there are no delays. Why? I have a theory, and it’s a simple one; Tesla is going to need a lot of batteries soon, but not just for new cars rolling off the assembly line. By 2020, when Elon wants the Gigafactory working at full capacity, the first Model S sedans will be running out their 8-year battery warranties. These warranties are rated at an unlimited amount of mileage, but don’t cover capacity loss, a problem not even Tesla can outrun.

That doesn’t mean the battery will be useless, but it will mean many owners are operating with less range than they’re used to. How much? There’s no way to tell except to wait, but by then I expect Tesla to have much better battery packs to offer owners. What if you could replace a battery that gets 265 miles per charge with a battery good for 400 miles or more? What Model S owner wouldn’t want that option?

It’s frankly a brilliant scheme on Tesla’s part, as they can create customers for life needing a steady supply of replacement batteries. You’re basically wrapping up a lifetime of service costs into a single bill, as the Model S needs little more than a few fluid changes and tire rotations over the course of its service lifetime. Minimal maintenance is one of the biggest advantages of electric cars, and one of the main reasons car dealer lobbies are battling Tesla’s direct sales model. But Tesla isn’t actually getting rid of those costs if you think about it; they’re simply pushing them off for eight years, and wrapping all that potentially-lost profit into a single battery swap.

tesla-chassis

It’s a great secondary source of income for Tesla, but it’s also a huge boon for customers. The simplicity of electric motors means they can run for decades without needing any sort of maintenance, and the ease of swapping out the battery pack is inherent to Tesla’s design. Now, instead of buying a new car every few years, all you need is a new battery at perhaps 1/10th the cost of a new car, giving your old ride new life in a matter of minutes.

Now, every person that’s purchased a Tesla becomes that much more likely to come back for a second or even third new battery, giving new life to an old car. It’s also the only way I can figure that Tesla will actually need all the planned volume for the Gigafactory.

Elon’s contract with Tesla that he signed last year calls for annual production of 300,000 vehicles by the end of his ten-year term in order to receive all his bonus pay. That’s a little more than half of the 500,000 batteries the Gigafactory can produce, and while other automakers may opt to buy some Tesla batteries, I’m not sure that’s the real game plan here.

Instead, Tesla could be creating a generation of lifelong customers. So far their customer satisfaction is the highest in the industry, and their response to criticism has been swift and on-point. But while everybody is focused on Tesla’s direct sales model, this could end up being just as dramatic a shift away from the auto industry as we know it.

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About the Author

A writer and gearhead who loves all things automotive, from hybrids to HEMIs, can be found wrenching or writing- or esle, he's running, because he's one of those crazy people who gets enjoyment from running insane distances.



  • Kaine Kornegay

    It makes a lot more sense in conjunction with the Swap Stations they’ve talked about building. At that point, they can sell you the car and “rent” you the battery and create a much more steady (and wallet-friendly) revenue stream. Now Tesla is selling the car, AND the stored electricity and renting the battery, which the consumer never has to worry about again. But you’d need a fleet of batteries before that would be possible.

  • jdavies

    I have faith that Teslas are built to last and will be sold on second hand to buyers on a tighter budget, whilst the wealthier will buy the latest model.

    Battery upgrades would return older batteries to tesla who will undoubtedly use them for something, I heard there was potential for these older batteries to be used as home storage batteries.

    As for people keeping the older models for decades, I think one thing that is seriously going to disrupt that is self-driving cars. The internal lay out of the car needs to be completely redesigned to accommodate this. I envisage an interior more akin to armchairs around a coffee table, with at least the driver’s seat on a swivel in case manual driving is required. If long distance drives can be done with little driver interaction, very few people would want a car where everyone faces forward.

    Tesla would be wise to try to make the chassis able to accommodate a modular interior arrangement, so that the chassis does not need to be replaced to adapt to new uses. With new chairs being able to swapped in etc.

    Likewise, if the lights can be swapped out for newer units that contain all the sensors required for self-driving, and the software updated to deal with it, then the older chassis will be able to evolve with the driving.

  • Johnny Le

    The thing is you can also swap out the body. So in theory, if you’re bored with how your car look, you can switch it out.

  • Doug

    I agree with the premise of this article. Every car I have owned, I eventually sold specifically because the engine was becoming unreliable and expensive to maintain. With the Model S, there is never a reason to ever sell it for that reason. I might just keep it for decades – I know my wife will never want to part with “her baby”

  • SeanD

    When CEOs negotiate bonus targets the intent is that will blow past them. So the 300,000 number is lower than I suspect Mr Musk estimates tesla will achieve. If they keep creating masterpieces and there is no economic crash or uber-concentration of wealth, then I would not be surprised if Tesla sells 500,000 cars.

  • No way

    Nah… electronics, rust, new features and safety standards on new cars and regulations will make people buy new cars anyway…
    But one battery swap might be interesting to make it run for 15-25 years.

    • w00t

      Tesla body and suspension is all aluminum. So the rust argument is invalid.

      • No way

        The point is that things get old and we replace them. We will probably see some 30 year old Teslas but they will be a small percentage.

        • Bob_Wallace

          30 year old Teslas will probably be doing taxi service in some of the poorest parts of the world.

          I’ve taken plenty rides in patched together Mercedes taxis. Used EVs are going to be highly loved by taxi drivers.

          • No way

            True. I can definitely see that happen :)

      • MB

        Discounting aging effects … there is going many newer features like better looks, smarter in-car controls or partially automated driving, etc coming up in 8 years. I cannot see most of these (affluent) early adopters bothering to switch batteries and keeping an old Tesla.

        Also there would be 3rd part companies (like http://www.priusbatteryrepairofhouston.com/about_us) who would try to recondition batteries for a lower cost, hence avoiding the expensive replacement cost.

    • Calamity_Jean

      I’ve kept several ICE cars for ten years or more each; I could see keeping an electric for 30.

    • Doug

      Rusting aluminum?

    • Doug

      The average age of all autos on the road in the US is already 11 years. The Model S should easily double that.

  • Julian Cox

    JB Straubel has specifically confirmed that outgoing Model S battery packs will see a second life in grid storage prior to recycling. These packs are known to be capable of 500,000 miles and technically in excess of 700,000 – offering a potentially great residual value in grid storage after any reasonable span of years in a vehicle, during which time stunning new battery range options and new value for money metrics will certainly have come along. Can definitely see this as the new iPhone rush every time a big battery tech advance comes along, especially if Tesla/Solar City is offering good money for old packs – which I believe it can considering Solar City can rent the pack by the KWh throughput for a decade or more irrespective of retained capacity.

    • Bob_Wallace

      ” These packs are known to be capable of 500,000 miles”

      Would you please explain what you mean by that? Do you mean 500k while still retaining 80% or better charge capability?

      And if so, can you back that up somehow?

      Furthermore, how does calendar life figure in?

      • Julian Cox

        Panasonic data shows 3000 cycles on this cell type to 70% retained capacity – roughly 700K miles interpolated.

        This a Tesla reference is to 500K, there is another later reference in a video from Germany or Amsterdam quoting 600K miles miles still serviceable, but here is the 500K mile reference: http://www.digitaltrends.com/cars/tesla-to-offer-eight-year-warranty-on-battery-pack/#!MXutM

        As for calendar life, that is harder to get to. What we know is that NCA cells have been running close to Lithium Titanate @ 20,000 cycles over 8 years retaining 60% of their capacity. Graph here at 34.02 or within a minute of the discussion thereafter:

        https://www.youtube.com/watch?v=pxP0Cu00sZs

        Hope that is useful

        • Bob_Wallace

          Thanks. I’ll copy the half million part here for others -

          “We don’t think anybody could put enough miles on to kill the (85 kwh) pack. That could turn out to be wrong, but we have half-a-million miles on one in the lab,” Tesla CEO Elon Musk, is quoted as saying in the report. “Even the 60 kwh customers will be able to take it well over 200,000 miles.”
          http://www.digitaltrends.com/cars/tesla-to-offer-eight-year-warranty-on-battery-pack/#ixzz31ZSNLWAo

          The Toshiba SCiB batteries used in the Honda FiT are said to be good for 4,000 to 6,000 cycles (depending on the source).

          • Julian Cox

            Toshiba SCiB 4000~6000 cycle lithium titanate could well be true.

            Sadly this looks like a bit shy of 80Wh/Kg. Tesla’s NCA is running at 260Wh/kg making SCiB impossible to get anywhere near the range or performance of the Model S – basically max out the 85KWh weight budget with only 26KWh of capacity.

            More I look at it, the astonishing thing about Tesla is the ability to control highly energetic chemistries in layers of safety subsystems. SCiB, LiFe – all nice inherently safe stuff at half or less of the energy density that makes Model S do what it does. Added to which batteries seem to cost about the same pound for pound not capacity for capacity.

          • Bob_Wallace

            Thanks. Hope you stick around. We’re short on people who understand battery issues.

          • Julian Cox

            Bob, I’d like to do one better than that – please drop me a line at julian@liionica.com I am in the mood to blow the lid off FCVs in a truly major way and would like to chat to you guys about that. This message will self destruct as soon as I hear from you.

  • Ronald Brakels

    I really hope there will be competition in the battery replacement area. I’m not going to buy a car that locks me into one specific battery maker. I’ve already had that problem with a car that had weird sized tyres. That said, there will of course there will only be one battery maker while the industry is taking off and it will take time to see what sort of standards emerge.

    • SApower

      Yes SA power price is so not cheap, a new pay tax of $20 over 5 year for Solar upgrade to grid and the $95 price hike. “Eventually the wheels will fall off the system with thousands of households deserting the grid” Just maybe you are right to say that.

    • JamesWimberley

      I’d be very surprised if you are gong to have a choice. The battery is the heart of the car and half its value. After all, you can’t get a replacement ICE engine or gearbox for your Ford pickup from anybody else.

      When buying an ev, read the small print on battery swaps very carefully.

      • Ronald Brakels

        Is this going to be like when I discovered that my printer toner cartridge wasn’t actually empty and I just needed to cover the sensors with some tape to get it working again?

      • Ronald Brakels

        I’ll make an attempt to write a more sensible comment even though it is difficult for me:

        Currently there is nothing preventing me from using a generic part in a vehicle if I want to. It won’t void my warranty. Not in Australia, anyway. So let’s say that in the future I want to replace my electric car’s battery pack and I see that a Nigerian company offers a compatible battery pack which is a better price than the official battery pack. If it has the same characteristics as the official battery then the only reason I wouldn’t be able to use it is sabotage on the part of the electric car maker. And as a mildly socialist nation, we tend to frown upon these sorts of anti-free markets behaviors. So we may have a situation where Australians, Indians, etc. will have unsabotageable cars, while some other countries may not be so fortunate. I assume that the more pro-capital anti-free market countries will block consumer choice in this area. And since more socialist countries are more willing to let market forces operate, they will have more consumer choice in this regard.

        • Bob_Wallace

          I doubt that there will be legislation that requires replacement batteries from only the car manufacturer in the US.

          We don’t have that sort of regulation for other consumer goods nor do we limit the sale of replacement parts. The only issue might be replacement while under warranty. And in that case the company would probably be replacing at their cost.

          • Ronald Brakels

            That’s good to know. So you’d say it is unlikely that in the future if someone replaces their Electrochariot 3000 battery pack with a generic version they will get a message saying, “This is not an official Electrochariot battery pack. Your vehicle has been bricked. Please contact your Electrochariot service representative to arrange an official battery pack installation. Insert credit card to pay $4,000 unbricking fee.”

          • Bob_Wallace

            I suspect that would greatly damage future sales. People would not take kindly to that.

            Serious foot-shooting.

    • Johnny Le

      I’m afraid you will be locked into one battery maker because Tesla arranges the battery cells in a specific way to allow fast charging. Other companies will catch up, but I doubt Tesla will give them the specific formula to make good batteries. So if you buy someone else’s battery, you may not be able to charge at the supercharger or it won’t be charged as fast.

      • Ronald Brakels

        As far as I am concerned, if Tesla only wants to give free electricity to cars using their batteries, that’s fair enough. I’d like it if other cars could use their charging stations for a fee, but they are their charging stations, they can do with them as they want. Just as how if I buy a car it is my car and I can do what I like with it, provided I either don’t break the law or I don’t get caught. For now of course Tesla battery packs are the only option for Tesla cars. But making Tesla supercharger compatible battery isn’t likely to be a problem in 15 years time. It’s simply a matter of knowing how much current the supercharger puts out and ensuring the battery pack can handle it. But I’m pretty confident it won’t be Tesla that turns the thumbscrews on people who are replacing battery packs. I’m more concerned with what might happen if I buy an electric car from a maker which then goes bust, stops making electric cars, and changes their business model to charging people as much as possible for replacement battery packs. I’d like to have the option of being able to buy a generic battery pack without my car’s software rejecting it because I didn’t buy it from the official supplier.

        • Johnny Le

          I think the solution might be the battery company will sell you a battery pack along with an adapter for your car.

  • Shiggity

    Plus Teslas also get free software upgrades wirelessly like your cell phone. Originally the Tesla Model S did not have ‘creep’ (When you’re in drive and you slowly move forward). They added it in with a software patch.

    • Alan Dean Foster

      Same thing with hill hold…free software update.

  • AWB

    Don’t forget Musk’s SolarCity is going to be selling a lot of battery packs to complement their solar panels.

    • Matt

      I’m sure that is one of the markets for the swapped out out batteries.

      • Dd

        Apart from loss of some capacity (in terms of KWhs), Does batteries loose efficiency too ? If then can some provide me some figures on this. Thanks in Advance

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