Tesla has announced that it will dramatically reduce the cost of its cells and battery packs – which means the company’s new target is a $ 25,000 electric car. Company CEO Elon Musk said its new “tabless” battery cells, along with changing the materials inside the cell, will allow Tesla to “halve” the price per kilowatt hour, which will make electric cars roughly the same as combustion. those of the engine.
The price per kilowatt hour (kWh) is the most common unit of energy used to measure the capacity of battery packs in modern electric vehicles. These prices have dropped dramatically over the past decade, from $ 1,100 / kWh in 2010 to $ 156 / kWh in 2019, a drop of 87%.
Experts predict the price will hit $ 100 / kWh by 2023, but Musk said Tesla will initiate a three-year process to bring the price below that – although he hasn’t said exactly what the price will be. target price.
A battery is not limited to its cells. A lithium-ion battery cell that costs $ 100 / kWh to produce means that a battery pack, with its additional components such as battery management and cooling systems, could cost between $ 125 and $ 130 / kWh. or more.
Current batteries cost between $ 10,000 and $ 12,000, depending on their capacity. Low battery prices could be the key to unlocking more affordable and bulkier electric cars. Tesla aims to reduce the cost of future packs to less than $ 6,000, which would drop the cost of cells to well below $ 100 / kWh.
The average price of electric cars in the United States has fallen, most recently falling from $ 64,300 in 2018 to $ 55,600 in 2019, a drop of 13.4%. And that’s mainly thanks to Tesla’s Model 3. But it’s still high compared to the average price of a regular gasoline-powered vehicle at $ 36,600 (although that price has increased).
The Model 3 was supposed to be Tesla’s first car for the wider market. From the start, the company’s “blueprint” – as stated by Musk in a 2006 blog post – spelled out how it would build a desirable electric sports car to convince people that electric vehicles can be cool (this which was not an easy task at the time.), use the proceeds to finance a more affordable luxury sedan and raise the funds for this effort in a car that hundreds of thousands of people could buy.
But Musk’s plan to make a $ 35,000 Model 3 never came to fruition, thanks to the company’s well-documented “production hell”. Today, the Model 3 Standard Range Plus starts at $ 37,990, the Long Range starts at $ 46,990, and the Performance starts at $ 54,990.
This isn’t the first time Musk has predicted Tesla would dramatically cut costs on its electric cars. He first promised a $ 25,000 electric vehicle in 2018, which he said was possible within three years.
“I think in order for us to get to… a 25,000 car car, that’s something we can do,” Musk said in an interview with You Tuber Marques Brownlee. “But if we work really hard, I think we might be able to do it in about three years.”
But on Battery Day, Musk added a new prediction: 20 million cars per year. This would be “about twice” the current production of Toyota, GM or Volkswagen, tweeted Ed Niedermeyer, author of Ludicrous: the unvarnished story of Tesla Motors.