Forums

Reasonable price per extra 10kWh battery

Reasonable price per extra 10kWh battery

Now that battery costs per kWh are heading down towards $100, how much extra do you think we should pay for a 70kWh M3 versus a 60kWh version (assuming these are options of course)?

Working on a pessimistic $150 per kWh as a current cost and allowing a 50% profit margin, I'd be expecting to pay $3,000 extra to add an extra 10kWh. But the Model S costs about £12,000 more for a 90D versus a 75D in the UK (probably about the same in dollars after taxes and tariffs) so that seems twice as expensive I'd have thought.

How much extra would you be willing to pay for extra capacity?

Zcurth | June 8, 2016

I think as far as the pack-level costs they're closer to $200 per kWh which is probably why it seems twice as expensive. Based on recent comments by Tesla (link below), it sounds like they're down to $190, and from the same call won't even need 60 kWh to reach the advertised minimum range. My best guess would be a 55 and 65 kWh option with about $6,500 in between.

http://www.greencarreports.com/news/1103667_electric-car-battery-costs-t...

alseTrick | June 8, 2016

Well, let's consider the costs for current Tesla models.

The S:
*From 70 kWh to 75 kWh is $3,000 ($600/kWh)
*From 75D kWh to 90D kWh is $13,000 ($867/kWh)

The X:
*From 75D kWh to 90D kWh is $12,500 ($833/kWh)

For the 3, I would estimate going from 55D kWh to 70D kWh to cost $12,000-13,000. Or, using your example, it would cost ~$7,000 to increase from 60D kWh to 70D kWh (~$700/kWh).

If batteries truly only cost $200/kWh, Tesla is making a killing on selling the upgrades.

dachuyn | June 8, 2016

$4000?

alseTrick | June 8, 2016

Sorry, this was a question on how much I'd be willing to pay and not how much I thought it might actually cost.

I would seriously have to consider buying an AWD/10kWh upgrade combo if it was in the $10,000 range.

I don't think I would be able to afford an AWD/15 or 20kWh upgrade combo, though. So we'll see what options they offer.

TeslaTap.com | June 8, 2016

Also it's unclear what that $190 kW cost includes. Likely it is just the battery cells. The rest of the pack, which includes considerable electronics, coolant lines, two expensive contactors, a lot of metal, and quite a bit of assembly (some automated).

dsvick | June 8, 2016

Depending on what the other options are and their cost, I'd consider up to maybe $8,000 for AWD and another 10kWh. If it also included SC I'd almost definitely go for it.

bernard.holbrook | June 8, 2016

As I wanted a hatchback or wagon, I am not willing to spend any extra on the car as I will need to keep two cars. If the M3 was a wagon, I'd be looking to option it up to $55K and dropping to one car.

dachuyn | June 8, 2016

@bernard.holbrook ... Probably many people are in this same situation ... And model X is too expensive.

A hatchback M3 would be great for many ...

Haggy | June 8, 2016

You also have to consider that the jump from the 60 to 85 for the S was $10K, and that included adding supercharging, and was presented as if it added $7500 to the cost.

draselder | June 8, 2016

Didn't Elon say a while back that AWD would be less than 5k for the M3?

Badbot | June 8, 2016

yes

Badbot | June 8, 2016

yes

jsl6v8 | June 8, 2016

I feel like I'm missing something, I've seen numerous posts that seem to insinuate that the AWD upgrade will be coupled with a battery upgrade, or require a battery upgrade. The AWD is just an extra motor essentially, it doesn't necessitate increased battery space. I understand that would effect range, and maybe that's what everyone is getting at.

Badbot | June 8, 2016

You should be able to order AWD and-or big battery.

JeffreyR | June 8, 2016

@jsl6v8 noted, " I've seen numerous posts that seem to insinuate that the AWD upgrade will be coupled with a battery upgrade, or require a battery upgrade."

I think a lot of people are hoping to get both and not being clear. What has been the case for the Model S pretty much since 'D' came out is that a Performance or Ludicrous version requires a battery upgrade and a dual-motor AWD upgrade.

Badbot | June 8, 2016

The max range option combines AWD and Larger battery.

bb0tin | June 9, 2016

The extra cost for Tesla to add 10kWh to an existing battery pack is nowhere near the $US600-800 current pricing. An entire 6.4kWh Powerwall is sold by Tesla for $US3000/6.4= $US470 per kWh. The weekly cycle (like a car) 10kWh Powerwall is sold by Tesla $3500/10= $US350 per kWh. This means that the incremental cost of extra capacity is less than $US350kWh since the Powerwall contains other than just the batteries.
So Tesla has about a factor of 2 difference in the price of the vehicle versus Powerwall prices. If the Powerwall prices were not based on the expected Gigafactory costs, but instead on the current battery costs, then these prices could be 30-50% less for the Model 3 batteries. This gives a possible pricing of, at a 40% reduction, $US210 per kWh. This gives the current vehicle price a factor of 3-4 above the possible? Model 3 price.
Using these numbers, Tesla could charge anywhere between $US2000 and $US8000 for 10kWh.
We therefore have no idea of even a ballpark figure that Tesla may charge.

The OP asked what people are prepared to pay. People have already shown that they are prepared to pay what Tesla already charges. They will be prepared to pay less. They may have to pay for extra kWh, even if they don't want it, because of how it is bundled, for example with the Ludicrous package. I will be making my decision on both pricing, bundling and Supercharger coverage.

mntlvr23 | June 10, 2016

I believe that the cost premium per kWh will be considerably less for the M3 than for the S or X models. The M3 is too important for Tesla to blow it here. The 375,000 who have reserved are generally a different sector of people than those who have the cash and willingness to drop $100k on a vehicle. As battery prices drop (and continue to drop over the next 18 months), this economy that has allowed the M3 to have an "affordable" base price, should have similar economies realized for the extra range.

To achieve the goal of accerating sustainable transport, Tesla has to get the masses to accept some paradigm shifts, particularly with how you will be refueling your vehicle on long trips. Currently it may take 20-30 minutes (or a bit more) to refuel (say from 20% to 80%). That is a psychological hurdle. Moreover, instead of filling up every 400 miles, like you can do with an ICE, you will find yourself refueling every 100-150 miles. This is seen as a huge inconvenience to many - and a mindset that has to be overcome.

Passing on the economies of dropping battery prices, and slowly creeping toward 400 mile ranges will make sense in order to maximize the conversion of reservations to orders and to have an increasing flow of new orders after that - and being able to start reaching the middle class.

eevee | June 10, 2016

It's interesting that with the new S60, it will cost £7500 to unlock 15kWh of capacity in the 75kWh battery (nearly $11,000!. In the US, this is $8,500.

So, going with the US price, this is $566 per kWh.

Personally, I'd be tempted if Tesla offered AWD+15kWh for £8,000, or in the US roughly $9,000.

In 5 years time, I can imaging prices being a lot lower. It would be great if the battery packs were easily replaceable (maybe they will be?) so you could then upgrade your pack after a few years.

If range increases and prices drop too quickly it will severely hit resale values. It would then be like phones, where the increased memory and performance of later models makes 5 year-old versions obsolete.

With ICE cars (and these are rough guesses so don't quote me), the trend is for more economy (mpg) so a 30mpg car 5 years ago may get 40 mpg from the latest model. So if you'd pay the same for, say, 275 miles range in 5 years as you do for 200 now it would be roughly on a par so resales could be similar. But if in 5 years you could get 600 miles range for the same money as you paid for 200 miles, the resale hit is going to hurt.

If the packs could be upgradable this may help resale values. Unfortunately leasing looks expensive here in the UK.

In the US, Tesla offer some great lease deals but we don't get those in the UK. I'd love to be able to lease an S60 for those prices. The equivalent here is about $1400 per month.

jdanielp_uk | June 10, 2016

I wonder if the S60 strategy indicates the likelihood that all Model 3s will come fitted with a standard battery which will be software-limited for base models and unlockable as an upgrade. Given the relatively modest additional price of unlocking the 'S75' range later compared to buying it upfront, this might suit a lot of M3 owners who may only be just about affording the base price model initially, but hoping to upgrade later with the likes of autopilot activation and unlimited supercharging. I would certainly consider this route to help reduce the initial financial burden if it does turn out to be the way Tesla does it. I can't believe that the battery packs won't be replaceable though, so maybe that would be a future option to extend range.

CraigW | June 10, 2016

Physically, the battery packs can be replaced in less than 90 seconds. With the newest model changes, it is obvious that the software for all Tesla is the same, making future offerings to unlock battery size almost a done deal. It also means any Tesla would be able to swap out the battery pack for another size.

IMO - Tesla ought to offer a base car for $35,000 US and offer a car with an upgradeable battery for $36,000. The later upgrade would still cost money, but that could change over time, as Tesla gets more experience with the Giga factory production costs. This would mean all but the most cash strapped people/businesses would buy the upgradeable battery.

That way almost everyone would be in the same situation as S60 buyers are in today. Perhaps testing out that way of marketing is part of the reason for offering an S60 at this time - Yes, I know all about the S40 and have even driven one. Very much like my old S60.

stevenmaifert | June 10, 2016

Don't try to overthink it on a cost per kWh basis. It will be ~$7500 and include Supercharging.

slasher0016 | June 10, 2016

Steven must work for Tesla since he already knows the pricing.

sybren.henstra | June 11, 2016

Elon has mentioned the less than 5 K for the AWD option, battery upgrade are much more expensive at the Model S and provides very good margins for Tesla. For Model 3 it will need to be a different pricing strategy due to decreasing production cost and much more competition and price sensitivity of the owners. Paying 35 K EUR versus 78 K EUR for the base Model S (60 KW) means a very different group of customers with different budgets etc.

Drdpharris | June 11, 2016

Given declining battery costs, I am guessing $5k for AWD and $5k for battery upgrade/SC. :-p

dachuyn | June 11, 2016

I think $4K for AWD since these are smaller motors ...

jlopezbrea | June 12, 2016

I expect model3 to be like new MS60 has a 75kwh battery than can be upgraded un case you need more range.

Mark K | June 12, 2016

Highly unlikely they'll put more cells in the base model 3 given the extreme demands on manufacturing cost, and the very high unit volume.

The software update technique they're using now in the S 60/75, and previously with the 40/60, are a result of unique circumstances, and the comparatively lower volume of those models.

At issue now is that they need a near term, lower cost of entry for new aspirational buyers who might otherwise expect to trade down to the 3 and defer a purchase to 2018.

The new 60 is amazing deal, and will entice many model 3 candidates to instead trade up and enjoy the car sooner.

It's an example of the innovative synthesis that happens when marketing strategy is cast from engineering culture.

Unconventional, and very cool.

bb0tin | June 12, 2016

@Mark K
I agree that the base Model 3 will have no software limited extra capacity installed.
What the 60/75 upgrade shows is that the cell cost is now low enough that Tesla feels comfortable introducing such a scheme. The 40/60 upgrade was for a very few cars. The 60/75 upgrade will potentially be for a large number of cars. Let's say that only 1/3 of 60 owners upgrade to 75. This means that Tesla has installed 15kwH and effectively priced it at 1/3 the S75 price.
It will be interesting to see how many people order the S60 and later upgrade to the S75, especially in those tax jurisdictions where is has beneficial tax advantages.

Drdpharris | June 12, 2016

I would not discount a software upgradable battery pack on the 3. Still saves money over developing and stocking two battery packs and would likely entice an upgrade either at purchase or later. Also enhances trade in price. Really the same arguments as for the S60.

Red Sage ca us | June 12, 2016

I really hope that Tesla Motors doesn't bother with 10 kWh or less capacity 'upgrades' in the future. Even 15 kWh is pretty bad... I'd prefer they sick with 20 kWh or more for each stage of range. Unless they can affordably build a 100 kWh battery pack for Model ☰, I'd not want them to have an unlockable capacity option for it at all. 60 kWh and 90 kWh, or 70 kWh and 100 kWh should be sufficient as starting capacities. Perhaps with a 120 kWh or 140 kWh version in the future. Something tells me they will try to have three capacities for Model ☰ to start, and I would be disappointed if none of those were above 80 kWh.

sp_tesla | June 12, 2016

Red Sage ca us | June 12, 2016

+10, Perfect plan for growth. great concept by one of TM greatest fan.

bb0tin | June 12, 2016

@Drdpharris
You said "Really the same arguments as for the S60."
The base Model 3 is about half the price of the S60. They will be cutting costs to the bone.

bb0tin | June 12, 2016

@Red Sagwe
The Model 3 is expected to get 215 miles EPA with less than a 60 kWh battery.
A 140 kWh battery would extrapolate to at least 215*140/60 = 500 mile range.
How many people want, or need, that range? I have never had a car with that range.

sp_tesla | June 12, 2016

"bb0tin | June 12, 2016
500 mile range."

Would translate to less than 400 mile for most driving environments.

Red Sage ca us | June 12, 2016

There are those who repeatedly claim they need to 'Drive It Like You Stole It' over tremendous distances, up hill, both ways, through hub-deep snow, at no less than 90 MPH, in sub-freezing temperatures, with 30-to-50 MPH gusting headwinds... So, they want to be able to drive under those conditions no less than 350 miles and have a 20% reserve left over 'just in case' when they arrive at a Supercharger to refill to 90% before hitting the road again. Those lifetime members of the Leadfoot Brigade apparently do Cannonball Runs rather frequently and simply cannot conceive of owning an EV until those parameters are met at the very least. In other words, 350 miles divided by 0.70 equals 500.

bb0tin | June 12, 2016

@sp_tesla
Why?
Is that the case when you compare the EPA of the current Tesla cars to the average for 'most driving environments'?

georgehawley.fl.us | June 13, 2016

Current battery pack has 7,104 cells rated @90 kWh, implying that each cell delivers about 12.67 wh.
That would be equivalent to about 79 cells providing a kWh. How much does Tesla pay for an 18650 cell from Panasonic? $1.50? That would make the cost of the current 90 kWh about $10K plus maybe another $5K for the box, the assembly and test, the climate control plumbing and controller and any other battery pack monitoring equipment. That would total $167/kWh which is plausible. If the only difference between a 60 kWh pack and a 75 kWh pack is the cells, this model would suggest a cost difference of about 79x15x$1.50= About $1,800 or about $120/ kWh. That should give a fair idea of the profit in the $8500 price of the upgrade from 60 to 75. (Or, alternatively, the extra cost built into each S60 of $1800)

Turning to the M≡ and assuming the battery box and other overhead are again the same for all variations, the cost difference is again just the cost of the cells, discounting the difference in assembly costs for different numbers of cells. But now we have to take into account the GF savings and the larger form factor. Suppose they save almost 50% of the cell cost by making them in NV, call it $.80/ cell ( humor me.). Plus they get 33% more energy per cell, requiring only 3/4 as many cells or about 60/kWh. The cost of 10 kWh worth of NV cells might be something like 60 X 10 X .80 = $480. This gives them lots of pricing flexibility. For example they charge say $6K for the upgrade but discount the price of all the models by $2K, giving them a profit of $3520 for the extra cells but making the whole product line a little more affordable, betting that most customers will go for the bigger pack.

Drdpharris | June 13, 2016

@George. Thanks. You may not be right, but it illustrates that the decision hinges on costs and margin across the whole model 3 line up. Tesla has shown that it is pretty good at thinking these things through.

georgehawley.fl.us | June 13, 2016

I take after my Mom. Even when I'm wrong, I'm right. Just ask my kids.😜

Red Sage ca us | June 13, 2016

President georgehawley: +21! Now that is precisely the type of entirely unfounded napkin math that I love! It is also the exact same type of prognostication that makes Naysayers blow a gasket. Keep it up!

CraigW | June 13, 2016

Assuming you live in a temperate climate, two types of people will opt for the base battery configuration for the Model 3. 1) People who are really stretching just to get into this car and 2) People familiar with Tesla cars and their ego allows them to avoid maxing out their car (215 miles will get you between any two superchargers along a travel route). Cold climates will drastically reduce customer type 2).

The second group will probably need the possibility of a battery upgrade and the first group may never be able to afford it, but will thank their lucky stars when it comes time to trade their car in.

I doubt any decision has been made yet - because it doesn't need to be made now. However, experience with the Giga-factory will determine whether Tesla puts a software limited bigger battery into all the base cars, or puts out two base cars, 1 having no upgrade capability and a second having upgrade capability but a marginally higher price.

Red Sage ca us | June 13, 2016

CraigW: +1! Correct! I wouldn't like it... But I would understand why Tesla Motors might try to do it that way. I intend to get the single highest capacity battery pack there is... However... If Tesla Motors can build the vast majority of cars with a 70 kWh battery pack, release the base car with 55 kWh available for use and upgradable to 70 kWh*... With the top-of-the-line version being 90 kWh or 100 kWh... That could certainly satisfy the needs of a lot of people.

.

.

* Maybe 66.5 kWh usable.

georgehawley.fl.us | June 13, 2016

Not going to squeeze 90 kWh pack into that little puppy.

70 will be a stretch.

up north | June 13, 2016

Not a little puppy, pretty good size wheelbase plus 4years technology improvement plus larger cell = at least 25% improvement in cell. Very doable.

Koz | June 13, 2016

With the larger form factor, more energy dense cells from the Gigafactor, I think they defintely could squeeze 90kwh or close to it into the model 3. Not sure they will but definitely hope they do offer 3 pack sizes with the largest in the 90kwh range. Stating this as both a 3 reservation holder and stockholder.

I believe there will be a lot of people stretching to afford the base model as well as a lot of people wanting the maxed out model. Hopefully Tesla goes after all of those customers as well as the ones in between.

CraigW | June 13, 2016

My guess is if you opt for a larger battery, not the upgraded battery for the low end, then you are likely to get 'supercharger for life of the car' capability thrown in. Of course, the cost might approach what is now charged for a Model S battery upsizing. We would hear complaints here but this would seem to be the best place to include the supercharger cost.

Red Sage ca us | June 13, 2016

President georgehawley: Oh, yes! I knew there was something I forgot to do... There is a more recent video featuring JB Straubel that I wanted to direct you to... He mentions the percentage of improvement in battery cells Tesla Motors expects to see from Generation II to Generation III. Let's see if I can find it in my notes...

08:00 -- JB Straubel notes the progression of the advancement of battery technology, and an expectation of 40% improvement over Model S with Generation III.
YouTube -- 4D9erJtiwuU

Badbot | June 14, 2016

the cells for the M3 should be 20700 instead of the 18650 now used for all models preceding the M3.

carlos | June 14, 2016

Anyone expecting a battery upgrade for less than 10K is in for a rude awakening.

Pages