A common misunderstanding.

A common misunderstanding.

So I have been reading these forums for a while being a major Tesla fan, and I have come across a common misunderstanding about the Gen 3 platform.

Many people state that Tesla gets their batteries for about $400/Kwh which maybe true for all I know. With this math we can assume that a 60 KW pack will cost $24,000 correct me if I'm wrong.

If we assume a 20% size reduction in the Gen 3 platform we can also assume the weight would be atleast 20% less, meaning the range would reflect that.

Many on these forums argue that even if the car was able to achieve a 200+ range with a 40 KW pack that their isn't a feasible way Tesla can produce the car under $35K before any applicable credits.

A 40KW pack in todays prices would be $16,000 meaning only $14-19K would be left for the car itself. Many on these forums have stated that hardly any ICE car now days cost that low and the ones that do are considered crap by most standards, with conclusions being made that either Tesla will fail to produce a car at this price or the car will be another Nissan Leaf.

One simple and obvious thing these people miss is how much the cars price is reduced when you take away the ICE, transmission, and who knows what other parts that are necessary in an ICE vehicle.

Based on my very simple calculations a Gen 3 vehicle in 4 years considering the projected price drop of batteries will be of very high quality for $35K, as a matter of fact I would expect it to be on par with BMW's and Audis in that price range luxury wise. Similar to the Model S. Not a KIA with a battery pack ($14-19K car).

A few things to consider:

1. ICE, transmission and all the parts required is a great portion of a vehicles price if not the greatest portion.
2. Battery prices are falling pretty fast.
3. Battery technolgy is improving greatly.
4. Electric vehicles should become easier to manufacturer due to less moving parts.
5. Electric vehicles can extensively use 3D prinitng manufacturing for a wider variety of parts than an ICE could. (I believe 3D prinitng will be a large part of manufacturing in the near future).
5. Mass production decreases price quite heavily.

When you look at it from this perspective, the thought that comes to my mind is How can they NOT produce a car for that price. Even in today battery prices it seems possible. It is starting to look that in a few years a battery pack would be on par in price with all the parts required to make an ICE system.

Any thoughts? Maybe they ney sayers can elaborate on why they consider a Gen 3 for the price unlikely?

ian | 30 août 2013

Duplicate threads. Please delete one. Thanks!

aleks | 30 août 2013

To add a little Pizzaz, Lets do a quick calculation on how much money could be saved for me by using this Gen 3 car. I regularly spend $250 a month on gas for my Toyota. $250x96 (8 Years) is $24,000 or 2/3 of the price of the car or so, not counting Electricity bills since I plan on using solar to charge my Gen 3. Now maintenance cost can potentially be reduced and time saved by not going to gas stations.

All things considered the Tesla Gen 3 maybe the cheapest full sized vehicle (not a motorcycle) available anywhere over the lifetime of the car, AND it will be atleast as luxuries as other cars in the $30ks.

Excited much??

and the best part is......

If gas doubles by the cars release (not all that unlikely) we can make that $24,000 in to $48,000 effectively paying for the car and then some in savings.

aleks | 30 août 2013

Sorry...How do I do that? I messed up the Captcha and it worked anyway despite telling me it didn't...

Samuel H. | 30 août 2013

Tesla's batteries definitely cost them less than $300 per KWH.

Using $200 per KWH, if Tesla used 50KWH and 75KWH battery packs for the Model E, they would cost Tesla $10,000 and $15,000 right now. With the average yearly battery price reduction of 9% a year, that would bring the price for Tesla down to $6,400 and $9,600 by 2017.

aleks | 30 août 2013

Great link! The only fault I see is that Elon has stated that prices would drop to $200/Kwh within the next few years. You calculate that we are already there. Although his estimates could mean the actual cost to consumer not his cost.

Iowa92x | 30 août 2013

Cost of battery is greater than the cost to build an entire ICE vehicle. Battery is a killer, if they can get the price down significantly on that, a 35k car is possible. Battery tech moves slowly, as does cell price drops.

Timo | 30 août 2013

@aleks, if you hover your mouse over Tesla logo (or somewhere nearby) you should see "edit" -link. You can then move that other thread to "none selected" from the dropdown menu. That should delete the duplicate.

Timo | 30 août 2013

Battery tech improves about 8-10% / year. I wouldn't call that slow.

Timo | 30 août 2013

If we were at $400/kWh two years ago then we should be at $200/kWh at about 2018-2020 range. Of course if we keep the range same then pack price drops faster than just kWh improvement, because lighter pack allows larger range with less kWh.

Brian H | 30 août 2013

And the actual rate over the last few years has been about 17%. IMO there's likely to be a step-change in there somewhere.

Iowa92x | 30 août 2013

8 to 10% is slow, Tesla battery costs $25k. Will be many years before that same battery is $5,000, which is where it needs to be to sell a $25,000 car. People want Accord prices, mid-20s.

Timo | 30 août 2013

I get an impression that you are quite a bit younger than I am, Iowa92x. To me this "many years" is not that many and I have got an impression that the older I get the shorter years get. Or you are just more impatient than I am.

Iowa92x | 30 août 2013

A $17k pack by 2020 is still too much $ for a mid priced sedan. An entire ICE vehicle can be built for that amount.

aleks | 30 août 2013

Battery tech may improve by 8-10 percent but go look at lithium prices. I feel the same thing is happening with the 18560(?) batteries what happened in solar prices a year or so ago. When my parents first bought panels they were around $4/watt now I can get good quality for $1/watt for my off grid house. Lithium is experiencing a similar bubble so those initial price estimates are no longer viable.

aleks | 30 août 2013

@iowa what I'm telling you is we may be looking at a $25,000 electric car with 150+ miles from an inferior manufacturer. Tesla I suspect will remain a mid to luxury grade manufacturer, I think tesla wont make cars for less than $30,000 anytime soon if ever, no matter where battery technology goes. I base that statement on Elon's interest in self driving cars and safety which will keep the brand as semi luxurious. I suspect when Tesla is established it will keep itself in the BmW Audi level of luxury.

If all

Iowa92x | 30 août 2013

Got you, agree.

aleks | 30 août 2013

IOWA, what is happening with lithium batteries particularly the laptop sized ones, is laptops are going out of style and tablets and ultra books are taking over which employ flat style batteries. Many battery manufacturers have invested heavily in this type of manufacturing and are now losing money because sales dropped and are dropping dramatically. Tesla quickly becoming the largest buyer of this type of battery giving them great leverage in price because for many companies selling to telsa can mean the difference between going out of business or not.

Bryan, I deleted the other thread or so I believe. I totally agree with your comment there about manufacturing capacity being an issue for Tesla, fortunately the Panasonic plant only cost a few hundred million, money Tesla will be able procure after the Model X begins selling and supercharger/store deployment is slowed. Elon may build a stateside plant to cover or supplement capacity independently or through a partnership.

Panasonic also recently announced an expansion of their facilities.

olanmills | 9 septembre 2013

I know it doesn't seem realistic, but I really hope that Gen3 can have an 85kWh battery or BETTER.

Gen3 is supposed to be more mass market, and I think you need a range that is comfortably above 200 miles just to overcome whatever apprehension potential non-EV-enthusiasts have about trying an EV.

Timo | 9 septembre 2013

I find that hope quite realistic. If next roadster will be build on GenIII platform there have to be space for big enough battery to provide power for that car. I see no reason why you couldn't get GenIII car with big battery, it would just cost more than base GenIII affordable car.

Haeze | 9 septembre 2013

Keep in mind the Gen III will be smaller, and lighter than the (gigantic) Gen II platform. It will not need the same battery to go the same distance. Estimates are that the 60kWh battery will get about the same range in a Gen III as the 85kWh gets in the Model S.

Brian H | 9 septembre 2013

Battery improvements will likely go to cost control rather than range beyond 200 mi, to start with.

Timo | 9 septembre 2013

Power still requires largish battery. That's why GenIII should have space for big battery. Range is a side-effect. Or vice versa.

nickjhowe | 15 septembre 2013

For a low Cd car like the Model S, below 60mph rolling resistance is dominant over aero drag. RR is proportional weight. Lower vehicle structure weight means lower RR which means a smaller battery, which means lower weight...

Though as Timo says, acceleration still needs kW - but since it is also dependent on weight, getting minimum weight is a VERY GOOD THING.

Timo | 15 septembre 2013

Otherwise agree, but I think it's 50mph, not 60. That 10mph difference comes from ancillary which doesn't depend on weight.

Also, I think you need high top speed and a bit downforce for grip for proper sport car, which means fighting air drag, so high power is still requirement.

olanmills | 26 septembre 2013

I just feel that for this to be a success, the car has to be AWESOME at a $35-40k price range. I think the media, the market, etc, will be extremely disappointed if the Gen3 car is like, sort of crap at $35k and you have to upgrade it to $60 or 70k to get a good car.

So I think for $35k, the core experience needs to be really good. It needs to be able to go 200 miles comfortably. That means I think it should have a "Tesla nominal" range of 250-300 miles. Whether that means an 85kWh battery, or if they can achieve that range with a smaller battery and lighter weight, doesn't matter, but I think that needs to happen.

Also, it needs to be safe, maybe not record-breaking safe, but in that 5-star category.

I think they can try to cheap out on the rest, as long as its cosmetic (not cheap as in the parts are breaking down after a year of use). For example, they could get rid of the gauge cluster screen and center console screen (though I really think they should try to keep the center console as an all touchscreen interface as defining Tesla feature). I think it's perfectly okay to go with cheaper stuff for everything else though, and offer upgraded trim levels for fancier things like leather, tech package, etc.

Brian H | 26 septembre 2013

A certain amount of that, plus cutting costs in half with 10X the volume per Elon's guesstimate, should suffice.