
Electric vehicle battery costs rapidly declining, Tesla cited as leading - mgdo
https://evannex.com/blogs/news/118365957-international-energy-agency-electric-vehicle-battery-costs-rapidly-declining-tesla-cited-as-leading-the-pack
======
narrator
I find it amusing to see so many people questioning why Tesla didn't release a
cheap Tesla sooner. The answer is: They don't have the batteries to do that.
That's why they are building the GigaFactory.

People don't get that, on a large industrial scale, you actually have to think
about supply. They think you just spend money and supply shows up because they
are used to thinking on a household scale where supply is generally infinite
for anything they could possibly consume.

I think one pervasive economic fallacy is that any amount of money can fix
anything. We just need to find someone to write a big enough check, either the
government or wall street and all those batteries will materialize instantly
out of some technology horn of plenty. This has driven the focus on "stimulus"
and "aggregate demand" in various forms of economic dialogue. We could use
more supply side thinking about very large problems that the economy faces,
especially in the public sector. Health Care, for example, is one of those
things where, if you're not thinking about supply, spending more money just
makes everything more expensive.

~~~
walrus01
Energy STORAGE is a huge bottleneck issue for anyone that follows renewable
energy news as well... Solar power itself has been cheap enough to be viable
for a long time, 330W 72-cell panels for roofs have been $0.64/watt for
several years now. You can quite economically cover the roof of a building in
enough high-efficiency 60 or 72-cell panels to generate far more kWh in a year
than the building will consume in the same year, but the problem is storage
for when the sun isn't shining. It's easy to produce 1600kWh/month from solar
panels on a roof, if your house only consumes 1200-1400kWh/month, but you need
to use many of your 1200-1400 kWh/month at night.

Off grid energy storage has been severely hampered by the lifecycle cost of $
per kWh stored. Lead acid batteries suck, lithium ion/liPo has until very
recently been very expensive in $/kWh. Other energy storage systems have been
limited in scale or are only feasible at very specific places, such as large
scale pumped-storage hydroelectricity.

If the cost of $$$/kWh stored comes down far enough, it will be entirely
possible to build a home that has no connection to the electrical grid at all.
Assume this prototypical home is in an American city where electricity from
the grid costs 8 cents per kWh. If you make a refrigerator sized battery low
enough cost it may be possible with TODAY's cost of solar panels to have a
lifecycle cost of 6 cents per kWh consumed. While simultaneously having the
effect of making that home energy-independent from the grid and the whole
thing being its own immense UPS.

The powerwall is the first step towards this.

~~~
nl
Flow Batteries[1]!

They work (as in: are being used in Africa & South America to power mobile
networks). Also my (office) building is powered by one.

They don't cost much more than lead-acid

They last much, much longer than lead-acid or lithium*

There is no limit to the number of power cycles(!!) and they can be deep-
discharged.

They do have disadvantages - they aren't suitable for cars, and are currently
fairly noisy when cycling, and have lower power density than lithium*
batteries. They also need to be periodically complete discharged (although
most have software to make sure each individual cell does this as part of the
normal use)

Disclaimer: An investor in Redflow owns my building (hence the power
source)[2]

[1]
[https://en.wikipedia.org/wiki/Flow_battery](https://en.wikipedia.org/wiki/Flow_battery)

[2] [http://redflow.com/](http://redflow.com/)

~~~
mavhc
167 Wh/l = 167kWh per cubic metre, say 16 hours of no sun, 16kW output at
night, seems reasonable

~~~
nl
Yep. Next time someone claims base load means renewables don't work do that
math. Also point to the experience in developing countries where they don't
have reliable base load, yet have similar uptime.

~~~
mavhc
Wind provides base load anyway, always windy somewhere

~~~
imaginenore
That's a bad argument. Arbitrary energy transportation is not a solved
problem. Power grids are designed to deliver from power plants to the
consumers.

------
pmarreck
Tesla is going to be a gigantic company one day.

Disclaimer: I own one (Model S P85+, about 2 years old). And everyone I let
drive it (yes, I am crazy enough to do that... As a fan who pushes the
bleeding edge, it's important to share the experience in order to change
minds... Anyway, my insurance covers me even when I'm a passenger!) cannot
stop talking about it afterwards. I actually think Tesla's market is limited
right now not only by the people who can't afford one, but by the people who
haven't even had the opportunity to drive one yet and have thus not yet had
their eyes opened...

Driving is believing. If you have any opportunity at all to experience driving
one... Do not hesitate. It makes everything else feel like a noisy clunker.

The older guys I let drive it, like the _real_ car guys of old... they have
the best reactions. The look of shock and disbelief on their faces... The
stories they start telling about their first muscle cars... The whooping and
"OH MY GOD"'s and whatnot... It's totally awesome

~~~
tajen
How do you deal with the 8-year limited lifetime? I evaluate a Tesla at 4x the
cost of a normal car: I can get a new car for €15k lasting 15 years with a
lively second market, Teslas are ~€30k, with free supercharger network, and 8
years warranty but no road license after that, and no second-hand market for
spare pieces. Have you calculated the total cost of ownership (including
insurance and free petrol) and how did it compete with other cars?

~~~
delecti
Can you elaborate on the 8-year limited lifetime? I've never heard anyone
mention anything about that before, and "but no road license after that"
almost makes it sound like it's a legal thing rather than a physical/practical
thing.

~~~
tajen
[https://news.ycombinator.com/item?id=11233898](https://news.ycombinator.com/item?id=11233898)

Basically you can drive a Tesla past 8 years, but after any repair, it can
only be re-validated for the road by Tesla. Given Tesla has no warranty after
8 years and no published pricing yet for servicing after 8 years, we don't
know whether we'll be able to have a car revalidated, let alone repaired.

------
sremani
caution. 1\. a tesla accessory site. 2\. the report is full of projections and
hard to understand what is wishful and what is not. 3\. GM: $145/kw Oct 2015 -
Tesla $100/kw in 2020, how is Tesla killing it?

~~~
synaesthesisx
Purely speculating here, but once the gigafactory is operational they'll
unveil the massive trick up their sleeve - Musk will announce new custom cells
based on high density sodium-ion technology. Tesla will become a world leader
as an energy company rather than an automative one.

~~~
patrickk
Musk has said before they monitor battery developments, but that he hasn't
seen anything to catch his eye so far. Even Musk would be insane to switch the
Gigafactory to a new, unproven battery chemistry. Plus, sodium-ion batteries
are heavier than lithium-ion, so they're (probably) unsuitable for cars.
Possible for Powerwalls though perhaps or a hypothetical Tesla truck where
weight is less of a consideration.

------
OliverJones
US$145 / kWh -- GM's late 2015 price for Volt / Bolt power -- is OK.

But the differential in price, in New England where I live, between peak and
offpeak electricity, is US$0.027 (2.7 cents) per kWh. I worked it out: my
investment in a battery setup at those rates would take about 17 years to pay
off: far too long.

If we want this to work, we need a smart grid: a grid that can announce
pricing based on current costs. Then we need baseload electricity costs
(hydro, nuclear, gas, coal) to be significantly lower than peakload (fuel oil,
Storm-King style pumped gravity storage) costs.

The smarts for a household energy storage system wouldn't be hard to work out
IF the grid were smart enough to advertise present costs, and meters were
smart enough to bill for present costs. My Power Wall could charge with cheap
power and run my lights during a nasty summer brownout.

I understand they're experimenting in Europe with announcing prices using the
FM radio sub channels now used to display song names. That's interesting.

~~~
snowwindwaves
The real time electricity price for several states is published.[1] Sounds
like you need a smart device not a smart grid.

Lots of utilities have adopted smart meters, Ontario and British Columbia
certainly have. I don't know as much about the states.

1:
[http://www.nyiso.com/public/markets_operations/market_data/p...](http://www.nyiso.com/public/markets_operations/market_data/pricing_data/index.jsp)

~~~
Zigurd
Hear, hear! Be _very_ skeptical when an industry wants to go from dumb to
"smart." They want you to remain captive. They want to resist margin pressure
as they get ridiculously past merely "mature." They want to resist becoming
the transitional backup system for a "smart edge." Newly built grids, and peak
capacity will be lighter, cheaper, and local. These trends will be spotted in
developing nations first, where the grid providers are unable to keep up with
new demand, but they will hit mature grids, too, because they will cost less.

------
mtgx
4x drop in battery prices, (or) 5x increase in density in only 8 years. Pretty
damn good for batteries that "aren't following Moore's Law", something most
battery-related articles are quick to remind us. Hopefully, this continues for
at least another decade, which should make EVs more than competitive with ICE
cars.

~~~
dimino
Batteries are the secret to most of the cool "sci-fi" tech we all want but
currently can't have.

~~~
macintux
Hmm. I think fusion is more important, but I'll take what I can get.

~~~
daxorid
We have fusion, 1 AU away. Utility PV gives us an EROEI or around 11. That's
good enough, such that a focus on storing the output trumps the development of
more abundant local production.

~~~
macintux
The sci-fi I'm most interested is a lot more distant than 1 AU.

------
Aelinsaar
Between this and the projected increase in PV solar efficiency, drop in cost
and toxicity of manufacture... I don't think I've felt this kind of cautious
optimism for a renewable energy infrastructure before.

~~~
toomuchtodo
Its almost like we're going to fix the climate change issue, slowly (ramping
up quickly)....by sheer luck of technological advancement.

~~~
bhauer
> _Its almost like we 're going to fix the climate change issue, slowly
> (ramping up quickly)....by sheer luck of technological advancement._

Which is an argument made by those on the free-market side of the political
spectrum—that technology will help us solve this problem more quickly and
efficiently than central planning and energy austerity. As someone who favors
free markets, I have gone out of my way to be an early adopter of electric
cars (2008 for me) and home solar (2015 for me) because I want the free market
to solve these issues. To be clear, I recognize that incentives such as tax
breaks have facilitated this. I obviously take advantage of these programs,
but I would be on board with electric cars and home solar even without the tax
breaks.

~~~
toomuchtodo
As a free market proponent, I assume you support including the externalities
of pollution from fossil fuels into their costs? Which would've made the cost
of electric cars and renewables cheaper much sooner?

~~~
maratd
> As a free market proponent, I assume you support including the externalities
> of pollution from fossil fuels into their costs?

How do you even calculate that?

For you to calculate externalities, you'd need to be able to assign costs.
What's the cost of greenhouse gases in the atmosphere? You can't calculate
something like that.

So let me answer with a simple NO. We don't need anything like that. Cleaner
technologies are overtaking and will replace fossil fuels. Our energy
generation technology has never been stagnant and it won't be now. We'll move
on to the next thing soon enough.

~~~
darawk
You can absolutely calculate that. There is an entire sub-field of economics
devoted to doing just that:

[https://en.wikipedia.org/wiki/Environmental_economics](https://en.wikipedia.org/wiki/Environmental_economics)

And it is pretty obviously the right way to think about the problem, if you
spend two seconds considering it:

The environment is a public good. Which means that it is owned by all of us.
Which means that when it is harmed, we have all lost something of value.
Therefore, the people doing the harm owe us money in the same way that Subway
owes you money if they accidentally put arsenic in their meatballs. Why do
places like Subway so rarely have arsenic in their meatballs? Because it
imposes an enormous cost on them, so they optimize their business to avoid
that cost. If environmental pollution entailed similar costs, businesses would
optimize those costs away (to the extent possible).

This is ultimately a far more effective solution than any regulation ever
could be. It's just a matter of choosing the right price. Because then what
you have is the ability for private individuals to make a living for
themselves rooting out cheaters and suing them in court. The system becomes
self-policing because everyone's monetary incentives are aligned with the
environment, and it is all mediated by one very simple, elegant idea: property
rights.

The environment is our collective property and right now private individuals
and entities are destroying it for free. That is simple theft, and fixing the
enforcement of those rights is the solution.

~~~
tomp
This is why I oppose free trade to some extent. Chine isn't only competing on
the price of their labor; they're also competing on the price of their
environment - pollution is simply cheaper there than in the US or EU. However,
the difference is, _their_ environment is _our_ environment!

Personally, I would install transparent tariffs for the whole world - they
would be based on the estimated cost of externalities depending on the laws in
the country of origin, and go down as soon as said countries adopt (and
credibly enforce) better environment protection laws.

~~~
nickik
Your solution will never actually work. Fact is, that so far in human history,
if you want to get from poverty to being rich, you need to have significant
pollution. But your solution it not really needed in the long run.

Luckily, the amount of pollution generally goes down as countries grow richer.
China is doing it cleaner then Britain or the US did it back in the day.

We need Free Trade so that we can grow, growth will lead (on avg) to a cleaner
environment. The next society can then maybe do it completely with clean
energy.

------
jpm_sd
"since 2008 [...] battery energy density had a fivefold increase"

Citation needed! In that time period, the highest energy density 18650 cells
on the market have gone from ~200 Wh/kg to ~250 Wh/kg.

~~~
pedrocr
The article presents the increase in one of the charts. They're measuring
volumetric density though (Wh/L).

------
olivermarks
Look to China for mass production of cost effective batteries, not Tesla...
firms like EV West help me demystify the true state of maturity of this market
[http://evwest.com/catalog/](http://evwest.com/catalog/)

~~~
mtgx
That's what I'm afraid of. That China will push a "race to the bottom" not on
just prices per se, but on lower prices with poorer quality batteries that
hold much fewer charges and degrade faster, making you want to dump your EV
battery after 3 years. But everyone will be too focused on their promotion of
"cheap long range EVs" to notice.

~~~
venomsnake
Revolutionary idea ... make batteries replaceable. We had it back in the days.
You could just remove the old batteries and put the new ones.

~~~
imron
Tesla cars can do this in less than 2 minutes - faster than it takes to fill
up a tank of gas.

[https://www.youtube.com/watch?v=H5V0vL3nnHY](https://www.youtube.com/watch?v=H5V0vL3nnHY)

~~~
kalleboo
Insert the typical disclaimer here about how they only did that demo to get
some California ZEV credits and how they're not moving forward with actually
implementing it for end users

~~~
walrus01
and the disclaimer about how the only semi-viable battery swap company went
bankrupt and shut down:

[http://cleantechnica.com/2013/05/27/no-better-place-
battery-...](http://cleantechnica.com/2013/05/27/no-better-place-battery-
swapping-company-going-bankrupt/)

------
ChuckMcM
I would love to see $100 kWh batteries. Worst case, my house uses 30kWh a day
in electricity so 90kWh would be a 3 day+ UPS for the house. Update the solar
on my roof and be off grid for an addition $9K in batteries? That would be
totally doable for me.

I think it would be hilarious if houses went back to just having a gas hookup
like it was prior to the spread of electricity.

------
Shivetya
So were are only talking about numbers they are hoping for, not currently in
production? GMs numbers are current, what are Tesla's current battery costs?
Just because they want 100 by 2020 doesn't mean they are leading the charge,
simply leading the wish list.

Still waiting on density improvements because frankly 400kg for 200 odd miles
of range is not good. Of course with higher density means better charging and
hopefully standards are ready for it

~~~
justina1
Tesla keeps their cost per kWh close to the vest.

Only public statement was in response to an analyst assuming Tesla was at
$260. Their investor relations team confirmed they're below $190 (back in
April).

[http://electrek.co/2016/04/26/tesla-model-3-battery-pack-
cos...](http://electrek.co/2016/04/26/tesla-model-3-battery-pack-cost-kwh/)

------
macspoofing
Can Lithium battery supply even meet the demand if a significant portion of
the auto market switches to electric?

~~~
Brakenshire
We'll find out! The lesson from oil and gas is that people find ways once the
price goes up and the demand is there. Lithium is very abundant. Do we know
what percentage of the cost of the battery comes from material costs?

~~~
Gibbon1
Well 'the internet' says a Tesla Model S battery contains about 11.7 kg or
14.2 kg of lithium. Currently lithium carbonate is $6500/ton. Molar mass is
~74 which is 14/74 = 19% percent lithium. So I'd assume it costs $30/kg

$35/kg X 12kg -> $420

On the other hand the Nissan Leaf contains 4kg or $140 worth.

I'm pretty sure a sustainable increase demand will bring more lithium onto the
market.

~~~
Brakenshire
Very interesting, thanks for doing that calculation. Lithium should scale
directly with storage capacity, so despite technological improvements in kWh
per unit weight or volume, that should stay relatively constant. So there is a
relatively hard limit here for price reductions.

------
disposeofnick9
Can't wait to buy the plastic battery holder grids for Tesla-sized cells. My
first 18650 pack is made from 4 laptop batteries and is capable of about 63 A
at 0.2C.

~~~
notJim
Just out of curiosity… whaaat does this comment mean? Are you building some
kind of railgun or something?

~~~
goldenkey
Just curious, how much damage could a domestic terrorist do with a railgun
made from consumer parts?

~~~
pjc50
Railguns are terrible and conventional firearms are much more widely
available. If you want a futuristic terror weapon powered by batteries, build
a multiple-watt laser. Take down planes by blinding the pilots! Fire it at a
glass sculpture in a shopping mall to give thousands of people life-ruining
sight loss!

~~~
goldenkey
I thought railguns could shoot projectiles with speeds faster than almost
anything. And since they are all about stored electricity inducing magnetism
can't a terrorist just charge up a huge capacitor like battery for a year and
then release a shit ton of energy in the form of a uranium or heavy lead
slug??

~~~
pjc50
Yes, although for terrorism purposes why is this tactially useful given the
high cost and complexity? It's not particularly easy to build a 3km/s railgun
in your garage, and the power storage ends up being hugely bulky.

Conventional terrorist attacks involving homemade explosives, firearms,
mortars, and even rockets have been quite cost-effective enough. I'm more
worried about someone combining quadcopters and explosives.

~~~
goldenkey
I suppose you're right. Its fun to think about the massive power of railguns
and their simplicity though.

------
tn13
I don't see how cars will have any impact on battery life. How many cars do we
sell each year? Even if we assume 10% of cars are electric it is nothing but a
drop in an ocean in terms of number of batteries being sold.

I am unable to see how Tesla car could have any impact on battery industry in
terms of economy of scale. Any battery based solution for homes etc. could
possibly bring economy of scale into picture.

~~~
macspoofing
Your comment would be more interesting if you put some numbers around your
conclusions. I personally don't know the current and projected relative demand
for Lithium batteries in electric cars and non-electric cars.

~~~
tn13
The numbers are one search away. In fact even without the numbers intuition
should be sufficient to see that it makes sense. Auto industry accounts for
20% of total Li batteries. Where as consumer electronics (which is probably
growing way faster than electric Auto) accounts for around 37%.

Most of the reports I have seen tend to estimate that Auto's share would
increase upto 30% by 2020 while renewable energy storage would grow to 60%.

It is not really hard to see that real breakthroughs in mass production and
lowered prices for Li batteries will come not from auto applications but from
power generation sector. I do not know of any sustainably profitable power
company that is operating in that area. It also probably explains why Musk is
thinking of things like Solarcity and Powerwall.

hint: Search "Global Demand for Li batteries" in Google images to see various
charts.

------
dovdov
If people pay $35k for a compact car, why would you sell it cheaper? Now Tesla
introduced the Model 3, I'd bet we'll see a $25k Leaf next year with better
range. It's business, don't blame it on the sub-par 25 year old technology
batteries.

------
agumonkey
What about recycling btw ?

~~~
scarlac
The batteries are highly recyclable. The internal structure changes over
time/use but the chemicals are intact.

Tesla have mentioned on several occasions that they will eventually take old
batteries and recycle them at the Gigafactory.

------
Animats
From the article: "Since 2008, estimates of battery costs were cut by a factor
four and _battery energy density had a fivefold increase._ "

We're not seeing that kind of improvement in mobile devices.

~~~
warfangle
In 2008:

The iPhone had an 1150mAh battery and, according to anandtech [0], 284 minutes
of talk time (3G) and 400 minutes of web browsing time (WiFi). It weighed 133
grams.

In 2016:

The iPhone SE has a 1,624mAh battery and gets 556.2[1] minutes of web browsing
time on WiFi.

It weighs 113 grams.

Of course, I have no idea what percentage of weight made up the battery for
either of these phones. I also have no idea what percentage of the cost to
manufacture the battery made up for either of these phones. But I do know the
iPhone SE @ 16GB is $100 cheaper than the iPhone 3G @ 16GB was, not accounting
for inflation.

We're seeing some improvement, most definitely. But unless someone has data to
compare the two batteries directly, we can't say by how much.

The smartphone world has been much more keen on improving power consumption of
the hardware in question rather than power storage. At the scale of power that
an automobile uses, the opposite is true.

0\.
[http://www.anandtech.com/show/2571/18](http://www.anandtech.com/show/2571/18)
1\. [http://www.anandtech.com/show/10285/the-iphone-se-
review/3](http://www.anandtech.com/show/10285/the-iphone-se-review/3)

~~~
randyrand
They say that battery tech has been improving at 2% a year.

That would mean we should see a ~37% improvement between 2008 and 2016. Seems
about right.

~~~
Animats
That's not a "fivefold improvement". A fivefold improvement is 400% more.

~~~
warfangle
Maybe the battery form factors that are being improved aren't appropriately
sized for use in smartphones? :)

------
bunkydoo
The big problem lies still in the fact that most electricity is generated from
coal and nuclear. Every Tesla on the road today is effectively a coal powered
car with the potential to be converted to green energy. Solar panels likely
being the equilibrium. But the decline in battery cost is good, means it won't
be long before they stop losing 1k on every car sold

~~~
will_hughes
You seem to be repeating the same falsehoods commonly quoted around Tesla
stories.

> Every Tesla on the road today is effectively a coal powered car

Assuming that your energy is entirely produced by brown coal power plants,
then even powering your electric car is still more efficient (and thus
cleaner) than running a petrol car.

Power generation sources varies wildly depending on region - Nuclear, Gas and
Hydro are big contributors in many areas. Wind and Solar in others.

> losing 1k on every car sold

you're conflating the profit on selling cars vs company profit. They make a
profit on the sale of each Model S/X, they're investing a lot of money into
expanding production.

