Tesla Hitting The Battery Accelerator
Originally published on RMI Outlet
by Bodhi Rader & Jesse Morris
Elon Musk took the energy storage world by storm with his announcement of the much-anticipated Tesla Powerwall battery. The Powerwall is sleek, modular, and oozes with the high level of design quality Tesla has become known for. But more importantly it’s cheap—much, much cheaper than anyone was expecting. The Powerwall is advertised at $350/kWh for its 10 kWh battery (the smaller 7 kWh battery costs $429/kWh), and the Powerpack (a utility-scale battery solution) is priced even lower at $250/kWh.
Industry analysts and organizations focused on the relationship between battery costs and adoption are still wrapping their heads around these cost announcements—RMI included. In the wake of this announcement, one specific question came to the forefront of our minds: how many more customers will be able to adopt energy storage systems in the near term due to the dramatically lower price point? More specifically, our Economics of Load Defection analysis forecasted cost-effective, grid-connected solar-plus-battery systems for millions of customers in the next decade. Yet our analysis used conservative battery price projections far less aggressive than what Tesla has brought to the market today.
In our modeling for both The Economics of Load Defection from April 2015and its predecessor, The Economics of Grid Defection from February 2014, our average battery price in 2015 was $547/kWh. Our models did not assume a price close to $350/kWh until 2022 (the $429/kWh price arrived in our models in 2018). This means Tesla’s batteries are seven years ahead of the prices we modeled. (The $250/kWh utility price point didn’t appear in our models until 2028, though we didn’t specifically model a utility-sized solution.) A seven-year accelerated price reduction means tens of millions of more customers will be able to cost-effectively install solar-plus-battery systems than we originally modeled in our analyses.
Granted, Tesla’s prices are aimed at installers, and there will be some markup before they reach the customer (SolarCity has stated systems will be installed for about $5,000 all-in). There have also been several articles discussing whether Tesla’s price truly incorporates all the bottom-line costs a customer might be charged, which certainly impact overall economics, but a broad theme is coming clear.
Cost Declines Racing Ahead
Costs are falling faster than projected. And with such a customer-friendly, aesthetic, well-designed solution that undercuts the cost of all current lithium-ion energy storage providers, competitors are feeling the pressure to revamp their own offerings.
And as with Tesla’s own announcement, further evidence of this can be seen from the electric vehicle battery front crossing over into the stationary storage market as well. For example, Daimler recently announced that it would sell Mercedes-Benz-branded lithium-ion residential and commercial batteries by the end of this month with deliveries in October.
A new study by Nature Climate Change analyzed over 80 different cost estimates from electric vehicle manufacturers for their lithium-ion battery packs. It found that cost estimates declined 14 percent annually during the period 2007–2014. The study points out when production doubles, the cost reduction is an additional 6–9 percent, meaning costs continue to decline nearly as rapidly as solar. Another compelling article points out that if this 8-percent rate continued through 2024, the cost of electric vehicle batteries could be cut in half to about $150/kWh. At that price, it would be very difficult for combustion-powered vehicles to compete with their electric counterparts on a cost basis—even in a world of $2–3 per gallon gasoline.
The Battery Fast Lane
If we assume that Tesla’s battery won’t hit the market until 2016 and that it will do so at the price just announced, that has big implications for our original Load Defection analysis—especially in two of the more vulnerable regions we analyzed: the Northeast and Southwest.
The chart below illustrates the impact of Tesla’s announcement. The dark blue bars show how much annual value in energy sales we projected grid-connected solar-plus-battery systems could capture by 2016 in our original Load Defection report. The lighter blue bars illustrate the greater value that can be captured if we use Tesla’s new prices. Furthermore, our original analysis indicated that this higher value would not be unlocked until 2022, whereas the value in the light blue bars below can be captured across the Northeast and Southwest by 2016 because of Tesla’s prices.
The Southwest commercial story is particularly interesting: our original analysis did not indicate that solar-plus-battery systems would be cost effective in the Southwest for several decades. However, as illustrated above, the Tesla announcement enables cost-effective deployment of systems for commercial customers throughout the Southwest in the near term.
Bottom line: thanks to Tesla’s announcement, in the Northeast and Southwest, an additional 60 million annual customer megawatt-hours can cost-effectively defect from the grid to solar-plus-battery systems more or less immediately, resulting in an additional $12.5 billion in annual utility revenue erosion.
Another factor to consider, which was not included in this comparison, is what might happen should solar prices drop faster than expected. Current prices and updated forecasts are coming in lower than what we modeled as well, meaning the economics could further accelerate.
The Market Responds
In the wake of the Powerwall announcement and other signs that cheap storage is coming soon, if not already here, the market has responded in at least three big ways:
Customers
The Powerwall battery has already received 38,000 reservations, with some of those for multiple batteries. The Powerpack already received an additional 2,500 reservations, including from customers like Target, Amazon, Southern California Edison, and OnCor, with a typical installation size of 10 Powerpacks. This means Tesla is potentially sold out until mid-2016 with these non-vehicle batteries easily capable of taking up the $5 billion Gigafactory’s entire capacity.
Utilities
Vermont utility Green Mountain Power is one of the first utilities already signed on to provide the Powerwall to its customers via on-bill financing and incentives. Green Mountain Power has announced that the systems will be used for resilience, sustainability, local power generation, peak demand reduction, and to generate overall cost savings for its entire system. Green Mountain Power’s interest in the Powerwall is of particular note because the utility will be actively investing in behind-the-meter assets to produce grid-level benefits—a utility business model that’s been talked about for decades by groups like RMI but has yet to manifest at scale.
Additional utility interest in Tesla’s new product has also been signaled by Duke, which wants to use the batteries to participate in PJM’s wholesale electricity market as well as for a University of South Florida solar project.
Hawaii
With third-party offerings coming down the line that pair solar with Tesla’s Powerwall, the solar-plus-battery combinations forecasted in the Economics of Load Defection analysis are becoming reality. Nowhere is this more apparent than in Hawaii. Our initial analysis showed how both load and complete defection are cost-effective in Hawaii—today. However, we’ve yet to see mass customer defection from Hawaiian utilities. One primary reason is the relative difficulty of finding providers capable of installing solar-plus-battery systems. However, with the Tesla announcement, this may no longer be the case. Just look at what Tesla business partner SolarCity had to say on the topic:
“SolarCity’s mission is to remove every obstacle that stands in the way of clean energy. Today we introduced a product that will make serious headway in this effort: fully-integrated and affordable solar battery backup systems for homes, businesses and governmental utilities.
In Hawaii, people are frustrated with utilities for having put a hold on rooftop solar in their territories. We hear often from people seeking a solar battery system that will allow them to sever ties from their utility completely. As I’ve written before, we don’t think this is optimal for the grid. But when the choice is between being grid-connected without solar or being off the grid with rooftop solar and a solar battery system, the choice is clear. As a result, SolarCity plans to offer an off-grid solar battery system to eligible customers in Hawaii beginning in 2016.”
The Race Has Begun: Let’s See Who Crosses The Finish Line
No one knows for certain what lower-priced batteries means for the grid. Readily available, cheap storage is certainly capable of changing the grid as we know it, but other factors including regulation, rate design, and incentive structures like net metering will all play an important role in the importance and relevance of batteries moving forward. What can be said with certainty is that the elusive, iPhone-like “coolness” factor that was missing from the storage space is finally here.
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**even in a world of $2–3 per gallon gasoline**
As EVs gain market penetration, gasoline will get cheaper. Expensive wells will be shut down as demand drops. The sensible approach would be to slap a greenhouse gas tax on gasoline. It might happen if the future solar industry is able to give greater political campaign contributions than the oil industry. Congress, the best politicians money can buy.
we pay 1,75 euro a liter gasoline.
a gallon is 4 liters. we are at a price of 7 euro a gallon.
1 euro is 1,12 dollar.
makes nearly 8 dollar a gallon gasoline price in the Netherlands.
Which is going to create a problem for your government in the near future. The current sin justification for heavy taxation on gas will go away as people adopt EV’s yet governments will still desires or require the same amount of revenue. So in countries like yours probable in less than ten years they will have taxes on miles driven to make up for diminished fuel tax revenue. Sad but In the end I think
countries with high fuel taxes will have high mileage taxes and thus driving and owning a car will still be a class issue.
Europe clearly already has a big gas tax. It is the USA, Canada, Australia, all the oil-exporting countries except Norway, etc. that need a higher gas tax.
I don’t think that a good long term strategy. It would a great if in the US we could tax gasoline as a percentage of value vs per gallon pumped. But the fact is most mileage driven is based on need and not desire it’s not fungible expenditure for most people. Increasing the taxes disproportionately hurts those with the least economic flexibility to adapt away from gasoline tech. There will come a time when more EV’s are available especially in the used market then with incentives we will see the kinda mass adoption we desire. A punitive taxation model will simply alienate large segments of the population for which transportation represents is a significant expenditure.
The type of car that someone buys is greatly influenced by gas price. When gas is above $4-$5/gal MPG is king, when $1-2/gal tanks are king. A CO2 fee, with dividend equal to all; is progressive.
I paid 99 cents CAD today for diesel
Per liter. You did buy more than a liter I would assume?
Ask yourself how much the Dutch Govt take….if Germany and the UK are anything to go by its 75 euro cents which makes them almost equal to the entire US cost per gallon. You might then wonder who is most disincentivised to open the doors to EV ! Have you heard one congratulatory note from any socialist Govt……all of the EU.i wonder if the Daimler product will be made available to its mother country’s citizens…….
there is no need for new taxes. just cut some of the subsidies the fossil fuel industry gets.
There is a need for taxes on a carbon basis. The subsidies the fossil fuels get are not that big. The biggest ones are the oil exporting countries like the mid-east and Venezuela where they sell gasoline for extremely cheap to placate their citizens.
If you include the money spent on the military keeping the oil lanes open, we subsidize fossil fuels to a great extent. If not for oil, do you think anyone would care for one second about the Gulf of Hormuz?
I wonder if many people questioned why we had a protection agreement with Kuwait?
During the antiterrorism rants, you never hear politicians point out how oil money is a large portion of those groups funding. Often from countries that were claimed as “friends”.
Eric, Are you suggesting, if Iraq had no oil, but exported Lots of cabbage, would our military be there?
–I hate cabbage.
Only if cabbages were really valuable.
citizensclimatelobby.org
Fee and dividend. Cost and reimburse previously uncharged externalities.
10-52 billion USD annually is big in my book. Curious as to what is big in your book?
http://priceofoil.org/fossil-fuel-subsidies/
Umm….no. Just no. As EVs gain market penetration, and battery storage takes off, oil and gas demand will continue to drop and fossil fuels will begin to lose economies of scale, its the inverse effect of what is happening to solar production and battery production.
As demand SLOWLY dries up, production will dry up as well, why would companies continue significant capital outlays into an ever shrinking market? This process will continue until players either exit the market, or shut down entirely.
There is no need to tax gasoline, unless you want to provide more funding to the dilapidated infrastructure of all the highways around, renewable energy sent a shockwave through the market, and the tsunami is following.
A lot of people will get EVs for the acceleration from 0-60, regardless of the price of petrol cars.
Others will love the ability to heat their EV remotely via their phone from 10 miles away.
Declining gasoline market projections will sink available capital for petroleum infrastructure and drive up the risk profile for investing in new ventures. So cheap gasoline is not a threat to EV. It’s more like a speed bump a speed bump that’s about to be hit by a massive electric powered locomotive. The bump is going to take more damage by being an impediment . You Green minded folk have been the underdogs for to long this baby is about to flip, renewable are going to be the leviathan the market monster within a generation as oil shrinks into the niche status you folk used to occupy.
At some point in the near future OIL companies will be begging for increased taxation as a means to protect and preserve their every narrowing profit margins. They would rather get some % of 4-5$ gasoline than that same % on 2$ gas. People are having driving needs those needs do not grow all that much simple because gas is cheap. That’s going to be the downfall of big oil not carbon taxation or Clean subsidies.
If anything your actually underestimating how fast this will happen, 1915-25 peak decade of the 2nd industrial revolution, more significant than all other decades of the century. Peak decade of the 3rd IR 2015-25, where before Ford, Edison, Tesla, mass automotive, reliable light bulb, alternating current, now Australia’s concentrated cooled solar cells, LED bulbs, EV’s, 3D printed buildings. Look at Japan’s maglev tunnels project, Chinese high speed railways for continental Latin America, continental Eurasia, even though the Himalayas and across the Bearing Straight to the US.
The Great Stagnation is over, here comes the roaring 20’s again, with it, high rise farming, liquid hydrogen fueled aircraft, the things that removed all horse transport in the world, all gas lighting, had long been around, they just became practical. A century earlier, the steam engine performance optimization, which had long been around, moved it from just factories and mines, to beating canals and sails, for all bulk transportation.
I republish images from this site, relating to device uptake and solar power availability, thanks Clean Technica, note that all other factors were no where near as significant as automotive and electricity in the last century, it will be the same this century.
How long until ExxonMobil buys out Tesla?
Gasoline can’t get cheaper. The cost of extraction and refinement is already higher than the profitability of sales.
The conflating of “storage” and “battery” with lithium-ion cell costs in these types of articles causes confusion.
Lithium-ion based storage devices are not simple packages of batteries. The technical aspect of balancing cells, and connecting multiple packs to a single inverter are non-trivial.
Six months ago the focus was on pricing of near commodity costs of lithium-ion cells. Now it is increasingly unclear what we are evaluating when discussing price trends.
Finally someone making sense. Better yet how is lithium going to capture the different revenue opportunities.The addition of multiple inverters won’t help and is too expensive a proposition to consider for no improvement
In any modeling, it is not accurate to predict the X-axis using the values on the Y-axis when the Y function dependent on X is asymptotic!
Your errors would be VERY VERY VERY BIG!!!
If you don’t believe me, ran a variance analysis on your Y values and compare the variance on the X values and do a regression. On the further end of the asymptotic model, a small variation in your Y by a few dollars could produce a plus or minus 25 year errors. Imagine that!
This means that the 7 years acceleration could just be an error from overhyping, always driven to fan the flames of Tesla’s stock prices.
Yes, the models are not at all realistic. Similar projections from the past, show that in 1991, cost was $3,200kWhr, projected to $380/kWhr in 2005.
Apart from the statistical errors you have pointed out, the claims made for future costs, require cells to be produced below material cost.
Do you really think that people were predicting price to drop below cost of materials?
The projections from the past? No, but nevertheless still wrong. Cells are not “kWhr objects”. They are composed of materials, if charged or not. Many of those materials are common commodities; copper and aluminum foil, graphite, polyesters,hydrocarbons. Only the cathode materials are perhaps unique, and they come from LG Chem, Umicore, BASF, 3M. And why would they sell below market price, or not be interested in collecting license fees on their patents?
Some NMC cells have halved in price over the last 2 years, but, even if the most expensive of cathode materials were replaced with NMC, the price reduction could be no more than 18%. Profits have been cut, because demand for 18650’s has not substantially increased. The projections assume that profit reduction can continue for 7 years, or whatever else they are “still wrapping their heads around”
There are many cost estimates that don’t include the reforming process ( often undertaken by subcontractors)
nor yield. The prices projected in this article are below cell material cost, let alone production cost.
Navigant Research reports that the materials used in the Panasonic cells which Tesla purchases cost just under $70/kWh, based on 2014 material costs.
And that manufacturing costs should add no more than $30/kWh to that price at high manufacturing volume.
Looking at the graph in this article I see only a small drop below $100/kWh in one of the curves. Without digging into the numbers behind that curve I would guess the foresee a future drop in materials cost as the market matures.
Navigant’s is cell cost – the chart is for ‘pack costs’. The cost conversion from Navigant’s cell to pack cost is not explained.
I agreed earlier that $70 was plausible projected material cell cost, if 60% of the total cell cost. = $116. Probably rather optimistic when cathode cost is the single largest cost, and in the hands of the raw material manufacturers.
However, a pack cost of $100/kWhr, would be below the cost of the cell. Tesla are not “7 years ahead”, but that the previous projections are wrong, just as the currently revised version is. Based as it is, on what Tesla claim, no matter how implausible.
Right. It is pack cost. I eyeballed the graph at article size and made the mistake of guessing a bit under $100. My bad.
Blowing it up it looks like the lowest line (Navigant Large Format Li-ion (Cell converted to pack costs) is about $150/kWh in 2030.
That is an aggressive prediction but it does allow for $100 for cell cost and $50 for packaging.
“Tesla are not “7 years ahead”, but that the previous projections are wrong”
We laugh. Previous projections were previous projections. Tesla seems to have hit their current price point about seven years earlier than others predicted. Tesla made the predictions come up short.
You continue to lower your value as a commentor by looking for ways to downplay Tesla’s achievements.
According to the chart, competitors will not obtain the same pack cost as Tesla, until 2030? And that cost, will be below current material costs, save for the exclusion of Tesla, who have obtained that future cost today?
The projections are wrong, or is there some ghostly factor that will continue to keep the line held where it is, as Telsa duck under it?
Apparently, the competitors include all of the major cell manufacturers in Asia, who will have to wait another 15 years, before it dawns upon them to use the machines and cell technology they created, to produce cells cheaper than they already do.
“Solar city has stated costs of $5000 all in.” Update from the Tesla shareholders meeting on June 11: Installation cost of battery $300-500. Not $1500, as CEO Peter Rive said. That was Elon Musk lightly rapping Peter’s knuckles. Total cost install expected $3500 + 500 = $4000. Bodhi and Jesse, its hard to keep up with the good news, isn’t it?
I believe Musk stated $3,000 for the 7 kWh “daily cycling” Powerwall and up to $500 for installation.
The 10 kWh $3,500 Powerwall is designed for backup.
http://electrek.co/2015/06/09/tesla-doubles-the-power-output-of-the-powerwall-without-changing-the-price/
That would make the daily cycle version $428/kWh as RMI reported above. $350/kWh for the backup version.
And that leaves me confused. I assumed the same size battery pack. Just more deeply discharged in the 10 kWh backup Powerwall.
Apparently different chemistry in each. The 7kwh is lithium manganese aluminum. which seems to get higher cycle life. The 10 kwh is closer to the car chemistry. The 10 kwh seems designed for higher power discharge now raised to a steady 5kw and up to 7kw. Again Musk failed to make clear if this was also the case with the 7kwh battery. What we need Elon, (are you listening), is a pdf with every last detail, installation process, exploded diagram etc. Apparently Elon has a habit of firing PR people who don’t live up to expectations (I am reading the bio right now) So heads may roll over the battery info snafu.
But one more speculation on my part: The powerpak at 100kwh is priced at $250kwh with presumably 5000cycles, just like the 7kwh powerwall. Now if they sold the powerwall for that price it would be 7x 250 = $1750. That would yield about 5cents kwh. They must make a profit at $250 on the powerpak. Therefore I boldly state that the actual cost of the 7 kwh powerwall is less than $1500 and could be sold for $2000 with a 20% profit! So standby for Tesla home batteries to fall by 33% within 2 years.
That is bold, and wrong. There’s the box, wiring, charge controller, BMS, thermal system, network interface, DC-DC converter, labor, and the cost of moving a 200lb item around. I think Musk is messing with the industry and at best only covering his direct costs with the current pricing.
I don’t understand what the advantage of Tesla selling the batteries for cost is. Yes, sometimes stores do “loss leader” sales as a competive tactic. And since the price of the batteries left “industry analysts” breathless perhaps there is something to the idea of non-profit batteries. But my own humble guesses as to the price before they announced it was rather closer to the actual price than many sources such as Bloomberg and the Guardian etc. The wall street journal is so wrong, so many times, that it is worth betting that whatever they say, the opposite is true. This has been the case with batteries.
Now, we are all using crystal balls, and not looking at the secret books of Elon Musk, so he indeed has access to info we just have to guess at.
There was one explicit statement by Tesla that the electrical components (such as the inverter dc-dc) in the battery were 10 cents a watt or less.
To the cost issue: If Tesla ‘sells’ the PW at cost now, with the assumption that the gigafactory will drive down battery costs by 30% in two years, they get to ‘hold’ the market share.
I expect that most of the installs for the PW and the commercial PowerPack will be at least a year out, but having a good read on the market ‘demand’ will allow them to start building the ‘initial’ assembly lines at a much larger scale, which will allow further reductions in costs.
you are insane, all this speculation, there is a reason Elon said current batteries suck, and he was not leaving out Tesla
And you are treading on very thin ice.
Start acting more like a reasonable adult or you are out of here.
Last warning.
Bob, who are you giving a warning to?
Why you, bink.
You’ve reached the end of your ‘bad boy’ rope. Civilize or perish.
really ? Bob, you are kidding right? vensonata is speculating all over the place and you try and call me out? I guess you you gonna have to hang me then. Dont worry though I am quite busy with projects
Bit of ego there Bob, you run this site?
Just the comments, and he does a much better job of keeping the discussion civil than any other site that I have frequented over the past twenty five years.
Perhaps you haven’t been around here enough to see it, but Bink frequently uses name calling and nastiness way in excess of what is needed to express an opinion. When he has valid information it is welcomed as part of the discourse, calling people derogatory names doesn’t need to be a part of it.
well. well, there goes that man badmouthing me again. Maybe if you guys stopped ignoring the facts to suit your narrative than we could all get along
You speak of ignoring facts? But we are supposed to ignore the fact that at times you call people names or use derogatory terms when making your points? As just seen here calling someone an ‘idiot’
Come on Bink, you and I have had conversations where even if our opinions diffeted you didn’t find it necessary to do that. And I suspect that it is this that is Bob’s issue with you.
It is obvious that you are as much of a VRB fan boy as any of the others are Tesla ones. However it is a positive addition to have someone that can provide the perspective of the utilities and is knowledgeable about these types of batteries.
Because even as you have admitted there is no VRB solution for the residential or small offgrid market yet. Which is why Vensonata and others are getting so interested in the possibility that lithium might provide.
And please notice that this was stated as might, fortunately for myself getting new storage is at least a few years and maybe 5-7 off. So I can wait to see how well these hold out long term and where prices go. However having the possibility of not being concerned about achieving a full charge every day, and more lifetime cycles provide a value that will help compensate for a higher cost than lead acid.
So if you could just remember that no one wants to be called an idiot, crazy, etc, most likely not even yourself, we can just have the conversations without the conflicts.
I’m one of the Mods. All of us who moderate the site have a common goal of creating a place where renewable energy can be discussed in a civilized manner.
oh please, does that mean letting people like vensonata pontificate and not be challenged by the moderator
Bink old boy, glad to see you back and in fine form! I presume that as with many in the engineering field you are not gifted with the social dimension of human interaction. It is alright, we will overlook your lapses. We hope to hear though, why you think it is impossible that small home packs of lithium will not sell for $250kwh as a package. Is it perhaps the electronics? Apparently the present packs cost about $700 for the non battery components and it is early in the game. Still I think I am not being too optimistic. You see, the price of the powerwall was so much lower than many in the “industry” had predicted that I no longer believe in the competence of the “industry”. So we are left “speculating”, without great expertise I admit, but still short of “insanity”.
how you doing vesonata. I wont engage you by responding to such speculation. The one thing you keep forgetting is ROI has two equations, cost and revenue. Elon is not making profit on this he is covering his raw costs and the house of cards will fall.
If i want to capture as many applications as I can as a revenue stream, lithium is not my choice, that is akin to lead acid.
>Elon is not making profit on this he is covering his raw costs and the house of cards will fall.
Now who is speculating on Elon’s costs and the outcome?
I suspect you are correct in that this has been priced near Elon’s current COGS for the products however when the GF starts producing the PowerWall demand ensures he will be able to run the GF at or near 100% capacity regardless of Model S & X demand. This will ensure that his COGS will fall significantly which should provide a nice profit margin.
listen, he made the powerpack for capacity. he is going to double the size of the installation to achieve this. That puts him (if you want to believe the prices) at $500 kWh for the battery pack. through in engineering and integration costs, power conditioning equipment and battery control installation, shipping and installation and O&M and you are well over $1,000 dollars kWh. probably why installations in California are avg $1,400 kwh
At the 2015 shareholder meeting, he made it clear that the output for both batteries would be increased from 2 kw continuous / 3.3 kw peak to 5 kw continuous / 7 kw peak because of user feedback.
JB Straubel joined him onstage and said to not be afraid to use the 10 kWh PowerPack for frequent daily cycling as one could reasonably expect to get 1200 full cycles out of it – about 1/4 of what could be expected from the smaller one.
Elon then said that Tesla expected 80% of their orders to be from utilities for the PowerPacks.
Morin, thanks for that, although I am still not sure that Elon included the 7kwh pack in the power boost. The reason is that it would be a full 1 hour discharge rate on the 7kwh pack at 7kw. According to what I have read on this chemistry that actually is entirely possible for the battery. I think Tesla set it at low discharge to begin with in order to insure longevity, with gentle treatment. The amazing thing is that nobody yet knows how these batteries will actually perform at every point in their lifecycle because the testing procedures are only simulations and the truly sophisticated measuring apparatus that are required for subtle measurement are just now being constructed by well funded University engineering departments. This is not my field but there is plenty of discussion available from leading scientists to inform my amateurish curiosity about batteries. There are just so many applications for “lightening in a bottle”, that the future hangs on getting this product right.
1C (meaning you discharge a battery at a one hour rate, 7kW for a 7kWh battery for example) is a non issue for battery life on the cells they are using. The cost of the power increase was on the DC-DC inverter which is likely low in volume.
Aha, that may be it. I did wonder why they would have babied these batteries when they can handle high discharge rates.
I have a new thought on pricing. I compare the 7 kwh battery with the 100kwh hour battery and thought that a 30% drop in price for the 7kwh could be coming in the next year or two. Some commenters objected because of the other component expenses. But consider that the 10kwh powerwall has similar electricals and is $350kwh price vs $428 for the 7kwh. Therefore a small pack can be made for 20% less at this time. Unless there are major differences in the actual battery cost between the two poweralls, it would seem reasonable that a price of $350 kwh can be attained by the high cycle 7 kwh powerwall which would be $2450.
Even from a small distributor, NMC cells from Samsung, Sony and LG, can be purchased for $260/kWhr (400 pieces).
That price includes delivery and sales tax.
It would be possible to construct a 400V battery, and dispense with the DC/DC converter. Stepping down from the solar panel voltage, then up again to 400V for the inverter, is inefficient. Like the car the 400V battery would be 96 series cell, grouped as 6 series cells, to allow consumer BMS controllers to be used. Typically low-cost NMC cells are 10Whr, so 700cells for 7kWhr, resulting in 7 or 8 parallel strings.
Tesla need the myth that only they can produce cells at low cost, but all manufacturers have access to the same raw materials. Automation means assembly costs are much the same too.,
I have no idea where you came up with the “Tesla need the myth that only they can produce cells at low cost” thing.
I appears to be a fabrication. Can you prove otherwise?
Tesla has a goal of driving the development of electric vehicles significantly faster than would have happened if they had not entered the game.
Tesla and Panasonic announced that they were going to build a very large, highly advanced battery factory with the goal of driving down battery prices.
Now we see other battery manufacturers announcing that they are also going to scale up production. I see that as exactly what Tesla intended to happen.
They have created the myth. Material costs are the same for all. Automation levels other costs. Tesla have no advantage in cell cost, other than they have signed up to buy a lot of 18650’s from a manufacturer that was losing ground in that market. Losing ground to even cheaper cells from other manufacturers.
Keeping the low cell cost myth alive, is a means of assuaging other concerns, like the appearance of better cells.
Right, Robert.
Tesla has no advantage over other EV manufacturers. Tesla simply took advantage and jumped into volume purchases while other EV manufacturers (except for Nissan) diddled around.
Please show me where Tesla created this myth of which you speak. I need my confidence in your credibility boosted a bit.
Some numbers
Allow Tesla 40,000 vehicles/year, each with 85kWhr
Total = 3,400,000kWhr
Sales of e-bikes in China: 40million/year at 0.2kWhr
Total = 8,000,000kWhr.
Somehow, Chinese manufacturers can’t beat Tesla on price, even though the cell dates to 1992, and Telsa are using the most expensive cathode chemistry?
For the same capacity:
NCA 7.4g Lithium
LFP 4.7g Lithium
LMO 3.4g Lithium
Earl “Madman” Muntz, a car dealer, made himself into a major TV manufacturer for a decade by simply having all the big corporate competitor’s models delivered to a room, disassembling them, then putting the parts back together in every possible combination that worked, and using the cheapest version for mass production at costs far below anyone else’s. In other words, he did what all of those competitors would have said was impossible.
Right now, the Tesla is the best electric car on the road. It remains so until you can prove that another one is better. Its competition is so far behind that you can’t prove that a large EV with a large battery pack is any better on having fires. There are none to compare. For some reason big car corporations’ engineering departments have insisted on purpose-built batteries, which we all assumed would be superior. Instead, here we are, stuck with Leafs whose air-cooled battery packs are definitely vulnerable, and really expensive i3s.
I’m sure that economies of scale will spread to other companies, but don’t spin conspiracy theories to bring down something you admit you don’t understand.
Sounds like a apocryphal story, spread by Muntz to defend
“a television chassis that produced an acceptable monochrome picture with 17 tubes” . An “acceptable” radio receiver can be built from one diode, and a few turns of wire. It is possible to remove all of the other manufacturer’s components, fitted for safety or reliability, and show that the set works. Unless, of course, it won’t do what the other sets do, or is a household fire risk.
I can certainly show that the Tesla’s cars are fire-prone, and Nissan’s 170,000 vehicles aren’t. Those cars have been set on fire, and subjected to damage from Tsunami.
The cells are inherently less likely to sustain a flame, unlike NCA, which is the most volatile cathode chemistry.
Having a large pack is a risk in itself, so is spreading that pack over the floor pan, where it may be subjected to damage from front, side, rear and beneath.
There is a wealth of data demonstrating the volatility of 18650 packs. Tesla have done nothing to improve upon past attempts to prevent fire propagation, nor have they implemented the patented means they claim to have.
There is no evidence of any heat absorbent material in their packs. The shift to the excuse that fire did not spread to other modules, is admission of propagation between cells within that module.
The i3 is the most efficient EV on the road, and less expensive than the Telsa. Its entire battery capacity is around the surplus capacity of the Tesla.
I fully understand Telsa’s battery, and can sort fact from fiction.
“I can certainly show that the Tesla’s cars are fire-prone”
Robert, I think you’ve now lied your way to the exit.
All I can say to that is Tesla is very confident that you’ll get at least 10 years out of them if used as recommended – that’s what they’re warrantied for and they expect that most units would last 15 years, perhaps even 20.
Keep in mind that 7 kw is PEAK draw not continuous so you shouldn’t expect to be able to drain the smaller pack entirely in 1 hour.
Love how they’ve out power played the Hawaiian (and Arizona) utilities! Cautionary tale!! I LOVE and agree with this statement:
“We hear often from people seeking a solar battery system that will allow them to sever ties from their utility completely. As I’ve written before, we don’t think this is optimal for the grid.”
Hope we get it right in NY. It won’t be due to lack of smart people at the PSC pulling hard.
New technical battery accelerator was presented during the Munich solar exhibition.
It is an electronic steering device allowing for all sorts of batteries being joined in parallel and now available, allowing for second hand battery cell re-usage in mix with other types of batteries:
http://www.asd-sunstorage.com/wp-content/uploads/2015/06/PACADU_ENG_WEB.pdf
http://www.asd-sunstorage.com/wp-content/uploads/2015/06/PACADU_Datenblatt_ENG_web.pdf
and a video:
http://www.asd-sunstorage.com/asd-pacadu/
“Jumped into what? ”
“Tesla simply took advantage and jumped into volume purchases”
“Other EV manufacturers did not “diddle around”,”
What manufacturer other than Nissan/Renault and Tesla have aggressively marketed EV (outside of China)? Which companies have done more than release a few compliance cars?
“The myth, of course, is that Tesla’s battery is technically superior and and cheaper than the opposition.”
I’ve paid a lot of attention to Tesla and other EVs. I’m not familiar with that myth. What I recall is that Tesla/Musk said that the battery they chose for the ModS was the best combination of technology and price for them at the time.
It’s not an original idea to enter a market where there are no direct competitors, especially when the product is expensive and directed at the luxury market.
Many gasoline ‘supercars’ have been produced that way.
Tesla are in that group, and threw money at every problem, including the battery. When Tesla produced the Roadster, they used the highest energy density cell they could find, and then used as many of those cells that would fit in the car. That is not a technological achievement, but poor engineering.
An EV is mechanically simpler than a gasoline car.
The problem has been the battery, so development of that battery took place while Tesla used whatever they could find. NCA is the most volatile and expensive cathode material, while the cells are low discharge rate and short-lived, unless large over-capacity is provided.
There are limits to the gains of volume production, and they are reached well before the levels of the planned factory – but Tesla not only need a low cost cell, but vast quantities. Material costs will limit what they may achieve, and they need a lot.
The more technologically advanced approach is to develop newer cells that add value beyond the material. Fire resistance, thermal properties and reduced packaging costs, return more than piling high. All of the major EV manufacturers are using recently developed cells.
There are more than just compliance cars. BMW built 600 EV-minis for the purposes of testing, and user response. Their present car bears no resemblance
The chart in this article is nonsense. A few disparate samples joined together by an eye-balled trend line.
There is no such chart for “pack costs”, but perhaps several according to type. Some packs contain all of the electronics, charger included, some are simple shrink-wrapped assemblies of cells. The 18650 pack market is well served. Trays, tabs, plates and fuses are all available.
Google. If you can’t find them, I will post links.
That’s the point of my reference to e-bikes, and other 18650 assemblies. Compare Tesla’s pack cost with those pack costs, and the result will be entirely different, yet apart from some elaboration, Tesla’s pack is the same.
“It’s not an original idea to enter a market where there are no direct competitors, ”
Your sour grapes comments are getting boring.
It’s a fact. Just because it is not flattering, does not make it untrue. You respond with ad hominem, Bob.
However, there is the battery, and Tesla’s claims for it, that are patently false.
Please post links to Tesla’s claims that you state they make.
BTW, I made no ad hominem attack.
I simply said that your anti-Tesla bias is tiresome.
Errr…tiresome refers to me. Accusations of bias are ad hominem.
How many battery claims do you want me to address?
We can start with the claim that the pack is fire-resistant.
Struable says the cells are spaced apart to prevent fire propagation, yet, they are spaced close to the nominal standard of 20mm centres. Trays are available to accommodate that, just as they are for all of the other claims made.
Then, ‘intumenecent goo’ is used as a retardant. There is a patent covering that, but from the supporting data within the patent, it can be seen to be only marginally effective, and performed with the cells in open space, whereas the cells are in a pack. Totally different enviromnents. .
The claim is false, because all that remains is the same fire risk as any other 18650 pack. NASA, FAA, NREL have tested such claims, and they don’t work. Finally, disassembly of the pack shows that the material is not used.
Overall though, the pack is just another of the same type, produced by many. The difference lies in the hyperbolic claims, that mislead.
Yes, Robert, your anti-Tesla crap became tiresome long ago.
You have a couple of valid points, perhaps.
Tesla is using a battery that will burn while other EV manufacturers are using batteries which will not burn. You’ve ridden that horse into the ground.
There may now be batteries that are cheaper per kWh than the batteries that Tesla is now using. With the gigafactory opening and Tesla moving to a different cell it is not clear that Tesla will be using a more expensive battery going forward.
It’s not clear that there was a cheaper/better option when the ModS was designed. The car was designed, according to Tesla, to use the best combination of price and capacity available in quantity at that time.
You can attempt to belittle Tesla’s accomplishments by claiming that anyone could have done what Tesla did.
Point is, Tesla was the company that brought a long range EV to the market.
Tesla built a very safe car that broke previous records. Anyone could have done that, but Tesla is the company that did.
Tesla has built a network of superchargers. Anyone could have done that, but Tesla is the company that did.
Tesla is gearing up for large scale manufacturing of EVs and batteries. Any company could do that, Tesla is leading the charge and apparently causing other battery companies to upscale and other car companies to develop “Tesla killers”.
I have no idea why you are unable to give Tesla credit for their accomplishments. That’s likely something that you are unwilling to reveal to others.
Now let’s deal with the ad hominem stuff. From Wiki –
An ad hominem (Latin for “to the man” or “to the person”[1]), short for argumentum ad hominem, means responding to arguments by attacking a person’s character, rather than to the content of their arguments. When used inappropriately, it is a fallacy in which a claim or argument is dismissed on the basis of some irrelevant fact or supposition about the author or the person being criticized.
I did not dismiss your arguments via an attack on your character. I stated that your anti-Tesla bias heavily colors your comments and makes your claims circumstance.
Your apparent anti-Tesla bias is very relevant. It means that your criticisms of Tesla are often exaggerated and you fail to acknowledge anything positive about the company.
That makes your comments untrustworthy.
But, you don’t see that fires are a problem? They are a direct consequence of choice. NCA may give high capacity, but is a fire risk. Recall how those fires were handled. Fires that refute all previous claims to the contrary.
You are trying to turn around what I am saying. I don’t care about what credit they deserve or not, but the false claims they are making. Those claims find their way to the Powerwalls too, and the hyperbole that drives them.
The battery must be the single-most talked about component of the car. The remainder, no matter how good or bad, is well within the reach of other automotive engineers. Isn’t it the case that the battery is the ‘killer product’? The one thing that others don’t have?
But, it’s nothing special at all, but just a route not taken by anybody else. An expensive and risky route, that needs a special factory to supply it. Again, they can do what they like, but Tesla’s approach is not honest. Bogus pack cost claims etc.
Cell prices are falling, but they rise too. There will be casualties from the current trend of seeking ever-lower costs.
“But, you don’t see that fires are a problem? ”
I see fires as a very minor problem. One fire to date. (Discounting the battery puncture fires which seem to now have been eliminated.)
Compared to gasoline powered cars that is a very, very minor problem. Even when batteries do burn they don’t go up in a ball of flames charring everything within reach.
And you continue your biased commenting. This “killer product” is a myth that you created.
Three fires. Initiation is one thing, propagation is another.
Tesla’s claims to have prevented propagation are false.
That is enough in itself.
But, if the fire were contained to the battery, then only that would burn, whereas the vehicle caught fire in each case.
That is the result of pressure and heat of cell combustion breaching the enclosure. Even without that breach, radiant heat is enough to set fire to objects at a distance.
It’s sleight of hand to compare the heat of combustion of gasoline, and a battery pack, without comparing the quantity of each that is burned.
A better comparison would be between current EV’s.
The battery is central to Tesla’s marketing. It is often the topic of cost analysis, and comparisons. How about other parts of the vehicle?
It’s important that the battery is seen to be the best ‘7 years ahead’ etc. It’s the one thing that the competitors just can’t have. Not today, but not even 7 years away. Nonsense.
One fire aside from the battery puncture fires. Which I acknowledged in my comment.
We agreed long ago that Tesla batteries will burn in the worst of cases. You’ve now flogged that old dead horse until you’re now smacking your whip against a grease spot on the pavement.
‘7 years ahead’ refers to the rapid drop in battery cost. You know that. That’s what the article is about. You just twisted it into something else.
One puncture due to road debris. Was there a claim of puncture for the second? Can you find a link to that, Bob?
The third was in Mexico, so out of US jurisdiction.
I think you are evading the point about what was claimed, and what happened. Tesla claimed to have solved propagation. Given the videos, that claim could not be sustained, so they moved to inter-pack propagation, but the Mexican incident says that too, is false. A pack goes up well after the initial fire. Tesla’s evasion says they know all of that.
The ‘7 years ahead’ is a comparison between general market projection, and Tesla’s current position.
“Our models did not assume a price close to $350/kWh until 2022 (the $429/kWh price arrived in our models in 2018). This means Tesla’s batteries are seven years ahead of the prices we modeled. (The $250/kWh
utility price point didn’t appear in our models until 2028)”
Either the model is wrong, so the comparison is worthless, or there is a claim for Tesla having beaten the projection by 7years, but without revaluation of the competitors’ current position. The remainder of the text is based around Tesla’s cost reduction, based upon the assumption that only they have it.
God, you are tiresome.
Look up the fire history. It’s on Wiki. Two punctures. One fire after one of the many major wrecks.
Various organizations predicted the rate of battery prices decrease. Tesla/Panasonic got there seven years ahead of predictions. End of story.
Please quit reposting the same old, same old.
I know, but there are mixed reports. One says punctured, others mention one puncture, but only running over debris.
It’s possible for impact alone to start an electrical fire in that pack. Shall I provide the reference concerning the effect of vibration on 18650’s?
As for the chart, Bob, it compares “pack prices” without defining what a “pack” is, or how they may differ from one manufacturer to another. Prediction (imaginary packs) are compared to Tesla’s (non-existent pack) based upon what Tesla claim for that pack.
The text then says “prices have fallen more than expected”
yet, the chart shows only what was expected, other than for Telsa. Do they know why Tesla have achieved such an advantage? No, they are befuddled.
“Industry analysts and organizations focused on the relationship between battery costs and adoption are still wrapping their heads around these costs announcements—RMI included.”
I suggest that RMI should consider making projections around the expected sale price of The Brooklyn Bridge.
Hello, I have couple of questions if any of the expert here is able to answer. Firstly, what is your assessment of Gigafactory’s cost forecasts ($250/kWH) and key issues to achieving this?
Secondly, at what cost targets (at the battery module level and the system level) does energy storage generate a positive ROI over a reasonable timeframe (~5-6 years)?
$250/kWh is probably more than Tesla’s battery packs cost today.
Last October it was reported that Tesla was paying Panasonic $180/kWh. It probably costs less than $70/kWh to turn cells into a finished battery pack.
http://reneweconomy.com.au/2014/battery-storage-costs-plunge-below100kwh-19365
It’s is expected that the Gigafactory will lower cell prices by 30% once running. That would take cell price to about $130/kWh which seems about right considering GM’s announcement that they will be getting cells from LG Chem for $145/kWh. The Gigafactory should be more efficient and operating at a larger scale that LG Chem’s operations.
Turning cells into packs should add about 30%, so $165/kWh for finished battery packs for Tesla.
—
Wait, you’re asking about storage. I answered re: EV batteries. But the cell costs should hold about the same. Panasonic/Tesla will use a slightly different battery chemistry for storage and EVs, but costs ought to be similar. If they manufacture cells for about $130/kWh they should have no problem selling a storage unit for $250/kWh.
Breakeven will depend greatly on avoided costs (current grid electricity costs) and the cost of electricity being stored. You probably need to calculate that for your own circumstances.
For example, if you normally pay 20 cents/kWh for peak power, could purchase off peak power for 10 cents you’d make 10 cents for each kWh you stored. If you store a full kWh each day it would take you 6.8 years to pay off the $250.
If you want to do a complete analysis you need to also look at what that $250 might earn put in a fairly safe investment. The real cost of a kWh of storage is $250 + “lost opportunity earnings”. $250 in a 2% bank account would earn $2 and about $14 over 7 years. That makes the effective cost of the kWh $264.
(Use your own numbers.)