Tesla Motors has broken ground on a potential Gigafactory location in Nevada, and has signed on Panasonic as a partner in this multi-billion dollar deal. The Tesla Gigafactory is really happening, and a new report suggests that it could lower EV battery costs by even more than expected.
That’s the word from the Motley Fool, which took a look at where Tesla is, where it’s going, and what it has to do to reach that $100 kWh price point that would give EVs price parity with conventional cars. Elon Musk has been quoted as saying the Gigafactory would bring about a 30% reduction in battery pack costs, but lately that is being seen as a somewhat conservative estimate.
But because Tesla hasn’t publicly discussed the cost-per-kWh of their battery packs, it’s hard to say just how much the price has to come down to reach the $100 per kWh cost, though most estimates say that the battery pack currently costs about 25% of the MSRP of the Model S. That would put the 60 kWh battery pack in the range of $17,500, or nearly $300 a kWh; a 30% reduction would bring that down to $200 a kWh.
But Motley Fool says that the 30% price cut doesn’t figure in any battery advances that could happen in the next few years, and instead relies simply on the scales of economy to bring costs down. A battery breakthrough could further reduce Tesla’s costs, achieving price parity (or perhaps even undercutting) combustion cars.
Of course this is all based on a best-case scenario; any minor hiccups along the way could delay the hoped-for cost cuts, and Tesla Model III buyers likely won’t have the $7,500 tax rebate to count on either.
Can Tesla bring battery costs on par with petrol-powered vehicles, or is this more bullish Elon hype?