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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. Th

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.

honkhonkpants 10y ago
Tesla consumes a small fraction of global lithium-ion battery production. When the overall market is much larger than the marginal consumption, the assumption that offering more money increases local supply holds perfectly well. Even if you assume that Tesla is demanding 5% of the battery market which would be an outside estimate that's still well within the region where paying more will get you more.
- mikeash 10y ago
  Worldwide production of lithium-ion batteries in 2013 was around 35GWh. The current rate is somewhat higher, I can't quite find how much. Tesla is currently producing around 100,000 cars/year. Each car has about 80kWh of battery on average (the options right now are 75 or 90), so that's about 8GWh. If they meet their goal of 400,000 Model 3s produced in 2018, assuming 55kWh of battery for those cars, that's 22GWh, not counting what goes into continuing Model S and Model X production. I'm not sure it's as small a fraction of global production as you say. One of the statistics they like to quote about their Gigafactory is that its final production will equal the total global production by the industry when construction started in 2013.
  - toomuchtodo 10y ago
    JB Straubel just mentioned at the annual Tesla shareholder meeting they're now expecting to produce 150GW of storage capacity a year at the Gigafactory, split between vehicles and energy storage based on demand for both.
    - mstachowiak 10y ago
      Just for clarification, Tesla's initial estimates for Gigafactory production was 35GW/year at the cell level and 50GW/year at the pack level (with some cells produced by other suppliers). At the shareholder meeting they speculated they could 3x those numbers with the current Gigafactory. This is at full production, which is years away.
      - witty_username 10y ago
        GWh right?
  - melling 10y ago
    Tesla hasn't sold 100,000 cars in their entire history. Last year they did sell 50,000 cars. Think they'll double that this year? http://www.fool.com/investing/general/2015/11/18/how-many-vehicles-could-tesla-motors-inc-sell-in-2.aspx http://www.fool.com/investing/general/2015/11/18/how-many-ve...
    - mikeash 10y ago
      They've sold well over 100,000 cars. The current total is around 140,000. They project 80,000 or 90,000 this year, with a slow start, so I think their current rate is 100,000 if not higher.
    - deleted 10y ago
      [deleted]
    - simonh 10y ago
      Do their sales in the first 5 months of 2016 somehow not count?
- deleted 10y ago
  [deleted]
  - codemanneil 10y ago
    Don't forgot Tesla Energy powerwall/powerpack as well
- jeromeflipo 10y ago
  How small a fraction? Tesla is expected to produce between 80,000 and 90,000 Model S and X this year. With 80 Kwh battery pack on average (my guess), Tesla currently consumes 6.4 Gwh of Lithium-ion battery. Back in 2013, the global production was estimated to be 35 Gwh (cf. Gigafactory announcement presentation). How much has it grown in the past 3 years?
  - Someone 10y ago
    Eyeballing the chart in the article, and assuming kWh/car to have remained constant: by a factor of about 6. The article also mentions 70% growth in the last year. Assuming equal growth in the other years, It would be about a factor of 5.
roninb 10y ago
> We could use more supply side thinking about very large problems that the economy faces What do you mean by this? I was under the impression that "supply side economics" meant throwing money at your problem to solve it (and removing regulation). That sounds like it's exactly what you're arguing against.
skybrian 10y ago
That's proving too much. It's true that factories don't build themselves automatically. But they do require funding. Unless someone predicts demand for a product, they won't write the check, and the people who actually do the work don't get hired. Better to say that demand is necessary but not always sufficient. Proven demand is a great motivator, but the manufacturers may require a lot of lead time if it's unexpected.
- narrator 10y ago
  Business is about risk though. The entrepreneur envisions a demand for a product and then builds the capacity to fulfill that demand. If the investment in production capacity were risk free there would be much more capital available for that endeavor. Who would make the investment risk free though? The government? Or in the case of our recent housing bubble catalyzed by the brave new financial world, some thinly capitalized derivatives underwriter? China has much more intervention in their economy to do this sort of thing, with the banks acting as partially privatized central planning. The role of government in economic planning is certainly an area for policy wonks to carefully consider. In a democracy there's a bit too much incentive for the public to, as Marx noted, vote themselves money from the public treasury.
alex_hirner 10y ago
> fallacy is that any amount of money can fix anything. That's exactly why I started http://openbatt.org http://openbatt.org The problem exists partly because incremental knowledge gains, such as additive formulas, are hard to trade.
- disposeofnick9 10y ago
  Chinese cells are like illicit drugs: quality varies widely and it's hard to know what someone is getting. I bought 4 laptop batteries from Amazon and all had overstated capacities of the 18650 chemistries... some had 2000 mAh (10% overstated), others 1800 (22% overstated) , when the 4s3p packs were marked "8800 mAh." I tested the cells individually, and they came out to about 85-99% of spec. The problem is also in the manufacturing because I have zero confidence in these cells not development crystals under anything more than 0.2C dis/charge and lower temperatures. I think we need an independent UL/CE for evaluating and lifecycle testing and certifying cells are less likely to short out or die prematurely by digging deep into how a battery is made against its specifications, conducting MTTF tests and many other tests and approaches for holistic grading and improvements. Otherwise, fake and shoddy cells will continue to flood the market with phony and dangerous goods. It can't be leveraged as a bureaucratic industry or incumbent protectionism, but to keep standards high as are for all other wall-powered devices. This will knock players whom can't or won't make good products out of the supply-chain, but they deserve it.
  - alex_hirner 10y ago
    There is significant effort (and progress) in standardizing and contrasting test methods [1]. This usually constitues a good first step in a market of lemons. [1] http://energy.gov/sites/prod/files/2014/09/f18/es_cunningham_2014_p.pdf http://energy.gov/sites/prod/files/2014/09/f18/es_cunningham...
jbooth 10y ago
Fortune 500 are all sitting on record amounts cash right now, they apparently see no place to invest it profitably. The thinking behind trying to pump up demand is that if people are buying more, the Fortune 500 will put that money to work selling things. Traditional supply-side economics is basically "shove money into those companies however possible".. but they're already sitting on piles of cash and doing nothing with it. How does more of that help?
- choward 10y ago
  > Fortune 500 are all sitting on record amounts cash right now Are you trying to tell me that the money isn't trickling down to the underpaid employees working for those companies? LIES.
rahelzer 10y ago
When stimulus is suggested in a Keynesian context, it is not to create new factories, etc. It is to provide demand to fully utilize the productive capacity which the economy already has, but which is not currently being used because of lack of demand.
- coredog64 10y ago
  What if the spare capacity is for factory building factories (FactoryImplFactory for the Java programmers in the audience)?
  - audleman 10y ago
    Lol, you nut!
IkmoIkmo 10y ago
Well Musk has often claimed that the cost of batteries doesn't magically go down due to big new innovations like we've seen in some other industries. Rather it's due to constant iterations, making small improvements, and economies of scale. Particularly that latter part is hugely important and hasn't been much of a factor yet in the specialised market that is car batteries. And that's why they're building a gigantic factory, because producing at scale can really do a lot to push the price of batteries down. But the notion that this is somehow unrelated to money is kind of silly, this is exactly the type of thing you could fix by throwing lots of money at it. The very reason they couldn't do it sooner because there was no cashflow to finance such a massive project.
- qaq 10y ago
  It's a function of both $ & time. You can't spend a trillion and build a Gigafactory in 1 day even though you are spending 200X the amount of money.
  - SEJeff 10y ago
    Bingo! This reminds me of the fallacy of the mythical man month which I often compare to pregnancy in women. With 9 women, you can't have a baby any faster. The gigafactory is monstrous (second largest building by square footage in the world I believe) and is doing some quite new things. This requires R&D and no matter how you skin it, that requires time, often in serial.
niels_olson 10y ago
> 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. If you haven't, I highly recommend Paul Starr's Social Transformation of American Medicine. The number of MD medical school seats in the US has remained at about 16k-17k for 100 years. https://www.nytimes.com/books/98/12/06/specials/starr-medicine.html https://www.nytimes.com/books/98/12/06/specials/starr-medici...
- tetraodonpuffer 10y ago
  do you think that if there were 10x as many doctors magically hospitals would charge you any less for your stay? or that pharmaceutical companies would charge you any less for their drugs?
  - lern_too_spel 10y ago
    No, for the same reason that I don't think increasing the battery supply will reduce the cost of leather seats. I do, however, think that if there were 10x as many doctors, my checkups would cost less (in both time and money) and my medical procedures would cost less.
  - aianus 10y ago
    > do you think that if there were 10x as many doctors magically hospitals would charge you any less for your stay? Eventually, yes. All those unemployed doctors are more likely to settle for working for a cheap hospital and earn 'only' ~$150k than switch careers or stay home on welfare. This would eventually decrease the cost of basic care.
  - geodel 10y ago
    I think fundamentally issue is how much expense is okay for healthcare. Current prevailing thought is whatever it takes. With consolidation of hospitals and other healthcare facilities: less options coupled with desire that even the most expensive healthcare procedures must be available to all irrespective of individual affordability, we are going to have ever increasing healthcare costs.
walrus01 10y ago
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.
- tirant 10y ago
  we have two options here: We either improve the power grid all around the world, so whenever it's dark in one side of the planet, the other side, sunny, feeds the darker part; or we start investing heavier on other renewable sources not depending on the sun, to provide the required energy for those nights and cold evenings in the the winter months.
- outworlder 10y ago
  How do the LiFePo batteries used in current electric cars change the equation? Not so great energy density, but can withstand an immense number of cycles.
  - jacquesm 10y ago
DougN7 10y ago
Yes, exactly this. And it applies in many things, such as guaranteed basic income (what would that do to the money supply, to the labor supply, etc). Too many times we think of specific scenarios but those are misleading unless you take the big picture and all its moving pieces into account.
- zanny 10y ago
  To claim that we do not have the industrial supply to meet a basic income of the poverty level (at least in the US) is to also say we do not have the housing or food to sustain ~300 million people above the poverty level. For the nation that is supposed to be the foremost in the world, and has been supposed to be for a century and a half, if that is true, all our talk of technological innovation and futurism is for naught, because we cannot even house and clothe everyone in our collectively agreed upon minimum possible conditions.
  - DougN7 10y ago
    Housing, feeding and clothing everyone is one thing. Doing so while telling all of those people that they also do not need to work is quite different. Having just 10% of the current workforce drop out would have huge repercussions. The GDP drop might make it so we can no longer afford it. Or as I've said before, everyone having more money with no increase in goods and services will create serious inflation. My point is systemic changes have to be looked at as a whole system. An economy and 300 million lives is very complex.
outworlder 10y ago
> 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. Interestingly (for me), when I leased my leaf the sales guy was talking about how Nissan could make a car with a much better range, but chose not to. It was amusing hearing it from a (otherwise backwards) dealership. It makes sense, of course. What I keep wondering is, if energy density (not just cost) increases significantly in the future, couldn't existing electric vehicles be retrofitted with "aftermarket" cells? Currently, resale value is pretty low, mostly due to battery concerns (both longevity - which I think is unfounded - and hopes of better tech). But, with otherwise so low maintenance costs, I figure these cars could have a pretty long life.
- Brakenshire 10y ago
  They do have schemes where you buy the car but lease the battery, you'd hope the cost reductions in manufacturing the batteries, and maintaining the battery fleet, would lead to reduced costs for the consumer. Might be a forlorn hope, though. But I agree, if I was buying an electric car, a standardized battery would be a huge draw.
- audleman 10y ago
  > Interestingly (for me), when I leased my leaf the sales guy was talking about how Nissan could make a car with a much better range, but chose not to Wait, what? How did he justify that? That sounds like saying Apple could easily make a laptop with much better battery life but chose not to. Why would they ever do that?
  - josephg 10y ago
    Apple could easily make a laptop with better battery - it would just be bigger, heavier and more expensive. Elon Musk claims the same thing about Tesla - that he could easily increase the range on Tesla's cars if they wanted to: https://www.youtube.com/watch?v=wsixsRI-Sz4 https://www.youtube.com/watch?v=wsixsRI-Sz4 . But with a range of ~300 miles he thinks they're fine.
frozenport 10y ago
Well, if they had more money they could build two gigafactories. So money can definitely help them scale up.
jokoon 10y ago
Won't the next problem be the geopolitics of lithium? I guess what drives the price of batteries is the fabrication process?
- Gibbon1 10y ago
  I'll throw my $0.02 in here, I think the issue with lithium is price spikes due to production capacity not keeping up with demand.
jernfrost 10y ago
Building the cheap mass market EV was what we tried in Norway. An utter failure. What it meant was a boring, underpowered car at a high price. Exactly the ugly little cars which EVs where known as. Elon Musk understood you had to start at the high end with low volume and high margin to fund your way to the mass market car.
- vintermann 10y ago
  Ah, the Th!nk. Well well, someone had to learn the hard lessons, so others can learn from them. Although, learn? It's easy to look at things in retrospect and say this billionaire was correct - but one might be committing the Texas sharpshooter error then. Vinod Khosla bet heavily on bioethanol over electric cars.
- Gravityloss 10y ago
  I think a car that is worse than average is a significantly different thing than a car that is average.

honkhonkpants 10y ago

Tesla consumes a small fraction of global lithium-ion battery production. When the overall market is much larger than the marginal consumption, the assumption that offering more money increases local supply holds perfectly well. Even if you assume that Tesla is demanding 5% of the battery market which would be an outside estimate that's still well within the region where paying more will get you more.

mikeash 10y ago
Worldwide production of lithium-ion batteries in 2013 was around 35GWh. The current rate is somewhat higher, I can't quite find how much. Tesla is currently producing around 100,000 cars/year. Each car has about 80kWh of battery on average (the options right now are 75 or 90), so that's about 8GWh. If they meet their goal of 400,000 Model 3s produced in 2018, assuming 55kWh of battery for those cars, that's 22GWh, not counting what goes into continuing Model S and Model X production. I'm not sure it's as small a fraction of global production as you say. One of the statistics they like to quote about their Gigafactory is that its final production will equal the total global production by the industry when construction started in 2013.
- toomuchtodo 10y ago
  JB Straubel just mentioned at the annual Tesla shareholder meeting they're now expecting to produce 150GW of storage capacity a year at the Gigafactory, split between vehicles and energy storage based on demand for both.
  - mstachowiak 10y ago
    Just for clarification, Tesla's initial estimates for Gigafactory production was 35GW/year at the cell level and 50GW/year at the pack level (with some cells produced by other suppliers). At the shareholder meeting they speculated they could 3x those numbers with the current Gigafactory. This is at full production, which is years away.
    - witty_username 10y ago
      GWh right?
- melling 10y ago
  Tesla hasn't sold 100,000 cars in their entire history. Last year they did sell 50,000 cars. Think they'll double that this year? http://www.fool.com/investing/general/2015/11/18/how-many-vehicles-could-tesla-motors-inc-sell-in-2.aspx http://www.fool.com/investing/general/2015/11/18/how-many-ve...
  - mikeash 10y ago
    They've sold well over 100,000 cars. The current total is around 140,000. They project 80,000 or 90,000 this year, with a slow start, so I think their current rate is 100,000 if not higher.
  - deleted 10y ago
    [deleted]
  - simonh 10y ago
    Do their sales in the first 5 months of 2016 somehow not count?
deleted 10y ago
[deleted]
- codemanneil 10y ago
  Don't forgot Tesla Energy powerwall/powerpack as well
jeromeflipo 10y ago
How small a fraction? Tesla is expected to produce between 80,000 and 90,000 Model S and X this year. With 80 Kwh battery pack on average (my guess), Tesla currently consumes 6.4 Gwh of Lithium-ion battery. Back in 2013, the global production was estimated to be 35 Gwh (cf. Gigafactory announcement presentation). How much has it grown in the past 3 years?
- Someone 10y ago
  Eyeballing the chart in the article, and assuming kWh/car to have remained constant: by a factor of about 6. The article also mentions 70% growth in the last year. Assuming equal growth in the other years, It would be about a factor of 5.

roninb 10y ago

> We could use more supply side thinking about very large problems that the economy faces What do you mean by this? I was under the impression that "supply side economics" meant throwing money at your problem to solve it (and removing regulation). That sounds like it's exactly what you're arguing against.

skybrian 10y ago

That's proving too much. It's true that factories don't build themselves automatically. But they do require funding. Unless someone predicts demand for a product, they won't write the check, and the people who actually do the work don't get hired. Better to say that demand is necessary but not always sufficient. Proven demand is a great motivator, but the manufacturers may require a lot of lead time if it's unexpected.

narrator 10y ago
Business is about risk though. The entrepreneur envisions a demand for a product and then builds the capacity to fulfill that demand. If the investment in production capacity were risk free there would be much more capital available for that endeavor. Who would make the investment risk free though? The government? Or in the case of our recent housing bubble catalyzed by the brave new financial world, some thinly capitalized derivatives underwriter? China has much more intervention in their economy to do this sort of thing, with the banks acting as partially privatized central planning. The role of government in economic planning is certainly an area for policy wonks to carefully consider. In a democracy there's a bit too much incentive for the public to, as Marx noted, vote themselves money from the public treasury.

alex_hirner 10y ago

> fallacy is that any amount of money can fix anything. That's exactly why I started http://openbatt.org http://openbatt.org The problem exists partly because incremental knowledge gains, such as additive formulas, are hard to trade.

disposeofnick9 10y ago
Chinese cells are like illicit drugs: quality varies widely and it's hard to know what someone is getting. I bought 4 laptop batteries from Amazon and all had overstated capacities of the 18650 chemistries... some had 2000 mAh (10% overstated), others 1800 (22% overstated) , when the 4s3p packs were marked "8800 mAh." I tested the cells individually, and they came out to about 85-99% of spec. The problem is also in the manufacturing because I have zero confidence in these cells not development crystals under anything more than 0.2C dis/charge and lower temperatures. I think we need an independent UL/CE for evaluating and lifecycle testing and certifying cells are less likely to short out or die prematurely by digging deep into how a battery is made against its specifications, conducting MTTF tests and many other tests and approaches for holistic grading and improvements. Otherwise, fake and shoddy cells will continue to flood the market with phony and dangerous goods. It can't be leveraged as a bureaucratic industry or incumbent protectionism, but to keep standards high as are for all other wall-powered devices. This will knock players whom can't or won't make good products out of the supply-chain, but they deserve it.
- alex_hirner 10y ago
  There is significant effort (and progress) in standardizing and contrasting test methods [1]. This usually constitues a good first step in a market of lemons. [1] http://energy.gov/sites/prod/files/2014/09/f18/es_cunningham_2014_p.pdf http://energy.gov/sites/prod/files/2014/09/f18/es_cunningham...

jbooth 10y ago

Fortune 500 are all sitting on record amounts cash right now, they apparently see no place to invest it profitably. The thinking behind trying to pump up demand is that if people are buying more, the Fortune 500 will put that money to work selling things. Traditional supply-side economics is basically "shove money into those companies however possible".. but they're already sitting on piles of cash and doing nothing with it. How does more of that help?

choward 10y ago
> Fortune 500 are all sitting on record amounts cash right now Are you trying to tell me that the money isn't trickling down to the underpaid employees working for those companies? LIES.

rahelzer 10y ago

When stimulus is suggested in a Keynesian context, it is not to create new factories, etc. It is to provide demand to fully utilize the productive capacity which the economy already has, but which is not currently being used because of lack of demand.

coredog64 10y ago
What if the spare capacity is for factory building factories (FactoryImplFactory for the Java programmers in the audience)?
- audleman 10y ago
  Lol, you nut!

IkmoIkmo 10y ago

Well Musk has often claimed that the cost of batteries doesn't magically go down due to big new innovations like we've seen in some other industries. Rather it's due to constant iterations, making small improvements, and economies of scale. Particularly that latter part is hugely important and hasn't been much of a factor yet in the specialised market that is car batteries. And that's why they're building a gigantic factory, because producing at scale can really do a lot to push the price of batteries down. But the notion that this is somehow unrelated to money is kind of silly, this is exactly the type of thing you could fix by throwing lots of money at it. The very reason they couldn't do it sooner because there was no cashflow to finance such a massive project.

qaq 10y ago
It's a function of both $ & time. You can't spend a trillion and build a Gigafactory in 1 day even though you are spending 200X the amount of money.
- SEJeff 10y ago
  Bingo! This reminds me of the fallacy of the mythical man month which I often compare to pregnancy in women. With 9 women, you can't have a baby any faster. The gigafactory is monstrous (second largest building by square footage in the world I believe) and is doing some quite new things. This requires R&D and no matter how you skin it, that requires time, often in serial.

niels_olson 10y ago

> 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. If you haven't, I highly recommend Paul Starr's Social Transformation of American Medicine. The number of MD medical school seats in the US has remained at about 16k-17k for 100 years. https://www.nytimes.com/books/98/12/06/specials/starr-medicine.html https://www.nytimes.com/books/98/12/06/specials/starr-medici...

tetraodonpuffer 10y ago
do you think that if there were 10x as many doctors magically hospitals would charge you any less for your stay? or that pharmaceutical companies would charge you any less for their drugs?
- lern_too_spel 10y ago
  No, for the same reason that I don't think increasing the battery supply will reduce the cost of leather seats. I do, however, think that if there were 10x as many doctors, my checkups would cost less (in both time and money) and my medical procedures would cost less.
- aianus 10y ago
  > do you think that if there were 10x as many doctors magically hospitals would charge you any less for your stay? Eventually, yes. All those unemployed doctors are more likely to settle for working for a cheap hospital and earn 'only' ~$150k than switch careers or stay home on welfare. This would eventually decrease the cost of basic care.
- geodel 10y ago
  I think fundamentally issue is how much expense is okay for healthcare. Current prevailing thought is whatever it takes. With consolidation of hospitals and other healthcare facilities: less options coupled with desire that even the most expensive healthcare procedures must be available to all irrespective of individual affordability, we are going to have ever increasing healthcare costs.

walrus01 10y ago

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.

tirant 10y ago
we have two options here: We either improve the power grid all around the world, so whenever it's dark in one side of the planet, the other side, sunny, feeds the darker part; or we start investing heavier on other renewable sources not depending on the sun, to provide the required energy for those nights and cold evenings in the the winter months.
outworlder 10y ago
How do the LiFePo batteries used in current electric cars change the equation? Not so great energy density, but can withstand an immense number of cycles.
- jacquesm 10y ago

DougN7 10y ago

Yes, exactly this. And it applies in many things, such as guaranteed basic income (what would that do to the money supply, to the labor supply, etc). Too many times we think of specific scenarios but those are misleading unless you take the big picture and all its moving pieces into account.

zanny 10y ago
To claim that we do not have the industrial supply to meet a basic income of the poverty level (at least in the US) is to also say we do not have the housing or food to sustain ~300 million people above the poverty level. For the nation that is supposed to be the foremost in the world, and has been supposed to be for a century and a half, if that is true, all our talk of technological innovation and futurism is for naught, because we cannot even house and clothe everyone in our collectively agreed upon minimum possible conditions.
- DougN7 10y ago
  Housing, feeding and clothing everyone is one thing. Doing so while telling all of those people that they also do not need to work is quite different. Having just 10% of the current workforce drop out would have huge repercussions. The GDP drop might make it so we can no longer afford it. Or as I've said before, everyone having more money with no increase in goods and services will create serious inflation. My point is systemic changes have to be looked at as a whole system. An economy and 300 million lives is very complex.

outworlder 10y ago

> 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. Interestingly (for me), when I leased my leaf the sales guy was talking about how Nissan could make a car with a much better range, but chose not to. It was amusing hearing it from a (otherwise backwards) dealership. It makes sense, of course. What I keep wondering is, if energy density (not just cost) increases significantly in the future, couldn't existing electric vehicles be retrofitted with "aftermarket" cells? Currently, resale value is pretty low, mostly due to battery concerns (both longevity - which I think is unfounded - and hopes of better tech). But, with otherwise so low maintenance costs, I figure these cars could have a pretty long life.

Brakenshire 10y ago
They do have schemes where you buy the car but lease the battery, you'd hope the cost reductions in manufacturing the batteries, and maintaining the battery fleet, would lead to reduced costs for the consumer. Might be a forlorn hope, though. But I agree, if I was buying an electric car, a standardized battery would be a huge draw.
audleman 10y ago
> Interestingly (for me), when I leased my leaf the sales guy was talking about how Nissan could make a car with a much better range, but chose not to Wait, what? How did he justify that? That sounds like saying Apple could easily make a laptop with much better battery life but chose not to. Why would they ever do that?
- josephg 10y ago
  Apple could easily make a laptop with better battery - it would just be bigger, heavier and more expensive. Elon Musk claims the same thing about Tesla - that he could easily increase the range on Tesla's cars if they wanted to: https://www.youtube.com/watch?v=wsixsRI-Sz4 https://www.youtube.com/watch?v=wsixsRI-Sz4 . But with a range of ~300 miles he thinks they're fine.

frozenport 10y ago

Well, if they had more money they could build two gigafactories. So money can definitely help them scale up.

jokoon 10y ago

Won't the next problem be the geopolitics of lithium? I guess what drives the price of batteries is the fabrication process?

Gibbon1 10y ago
I'll throw my $0.02 in here, I think the issue with lithium is price spikes due to production capacity not keeping up with demand.

jernfrost 10y ago

Building the cheap mass market EV was what we tried in Norway. An utter failure. What it meant was a boring, underpowered car at a high price. Exactly the ugly little cars which EVs where known as. Elon Musk understood you had to start at the high end with low volume and high margin to fund your way to the mass market car.

vintermann 10y ago
Ah, the Th!nk. Well well, someone had to learn the hard lessons, so others can learn from them. Although, learn? It's easy to look at things in retrospect and say this billionaire was correct - but one might be committing the Texas sharpshooter error then. Vinod Khosla bet heavily on bioethanol over electric cars.
Gravityloss 10y ago
I think a car that is worse than average is a significantly different thing than a car that is average.