Anyone who knows EV’s knows that the highest cost of doing business comes from the expensive battery technology that, I think it is fair to say, has not matured. It’s a lot like the first cell phones or tablets; pricey at first, but more and more affordable as time goes on. During a stockholder meeting, Tesla Motors CEO Elon Musk says that he believes the cost of EV batteries will drop below $200 a kWh in the “not-too-distant future.”
What does that mean? Any number of things. Tesla has unveiled two new models in the past year, the Model S sedan and Model X crossover, and both already have substantial pre-orders. So much so, in fact, that Tesla is not loaning cars to auto journalists prior to it going on sale, breaking a much hallowed tradition as sucking up to the people who review your billion-dollar products.
While so far Tesla has focused on high-end luxury electric vehicles, they are also working on a cheaper EV for the masses. When asked about the $200 kWh battery price tag that will supposedly help make EV’s cheaper and more competitive on the open market, Tesla CEO Elon Musk says he sees the price dipping below that point on the “not-too-distant future.”
Tesla has been quoted as saying the Energy Storage System, or ESS, on the $109,000 Roadster costs around $36,000 to replace. At 53 kWh, that puts the battery cost per kWh at $679. If the price per battery were $200 per kWh, that would shave off over $25,000.
Tesla is planning to unveil a cheaper, mass market EV in the next few years, perhaps as soon as 2015. But will that be enough to bring more people over to the EV market? These days it all comes down to money…but who knows where the world economy will be in four years? If a Republican gets elected, is he going to pull the plug on electric vehicle incentives and research loans?
Scary thoughts, but Tesla is committed at this point, and I think think Musk is all-in with this venture. He has to make it work, and if Tesla ever hopes to be more than a profitable acquisition or niche luxury car maker, it will have to make a car for the masses (like me!)
Source: Autoblog Green
PDF 
About Christopher DeMorro
Musk made this statement during the Q4 earnings call.
The $200/kWh on the pack level are not achievable he said.
This was for the cell level! Pack includes much more like cooling, thermal control, wiring, BMS, packaging and will not reach the $200 in the foreseeable future according to musk.
Also do not confuse price (currently 679 according to your calculations) and cost of production currently $300 according to Tesla IR.
Yes, batteries are the future of EV’s, and many companies are trying to make them more efficient and cheap. A123 Systems (hiring a slew of people with 30 open position posted on The Green Job Bank), Amprius, Boston Power (working on small batteries for laptop, and moving to automotive ones –they’re hiring automotive systems engineers, and have a total of 17 open positions), CNano (developing carbon nano-tubes for Lithium-Ion batteries), Compact Power, and EnerG2 working on nano materials for super-capacitors. A couple of others, Cymbet and Deeya Energy are working on batteries for other systems, but if they’re successful, I’m sure they’ll move to automotive which might be a bigger market overall. In total, the Green Job Bank has about 100 open positions in the US related to battery technology.