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It currently costs about $2.50 to manufacture a battery cell. There are 7,700 cells in a standard battery pack. That’s $19,250 in cells before battery pack asse

It currently costs about $2.50 to manufacture a battery cell. There are 7,700 cells in a standard battery pack. That’s $19,250 in cells before battery pack assembly. I don’t know how they are making money on this. I’m inclined to believe they’re losing money, or someone is somewhere in the line. Maybe they expect those battery costs to decline rapidly in the near future? What do you think?

cjbprime 8y ago
$2.50 at what volume? Are you saying that's Tesla's cost, or someone else's?
- tranchms 8y ago
  I think they’re doing about 3.5 million cells a day. The final production target is 10 million, from what I remember.
aaomidi 8y ago
Maybe its cheaper to make the batteries in China?
- outworlder 8y ago
  Doubtful, otherwise the Gigafactory would make little sense.
  - aaomidi 8y ago
    I said it'd be cheaper, not more expensive.
dymk 8y ago
Where are you getting the $2.50 number from? I'd imagine they're banking on cost savings via mass producing cells themselves, and improvements in the rest of their supply chain as demand for batteries goes up.
11thEarlOfMar 8y ago
They manufacture their own batteries in their Gigafactory outside of Reno, NV. They make more Li Ion batteries than any other battery manufacturer. Their batteries cost less than $2.50. https://electrek.co/2018/11/20/tesla-gigafactory-battery-cells-made-cost-advantage-panasonic-lg-report/ https://electrek.co/2018/11/20/tesla-gigafactory-battery-cel...
- Someone 8y ago
  I can’t easily find a description of how this partnership works, but I think “Panasonic makes batteries in Tesla’s building, and Tesla packs them together for use in their cars” is a better description. If so, I would expect at least some of that better margin will flow into Panasonic’s pockets (what part, I wouldn’t dare even guess)
  - nickik 8y ago
    The problem is that the battery IP is owned by Tesla at least in part. So its not Panasonic producing Panasonic batteries in a Tesla building but rather its Panasonic building Tesla batteries in Tesla building. Panasonic could not just sell these same batteries to others.
    - greglindahl 8y ago
      Apple has a similarly complicated relationship with a lot of their subs.
    - tranchms 8y ago
      That’s not correct. Panasonic owns the IP for these batteries. They have a contract with Tesla to produce for them, but Tesla’s demand is so high they can’t produce enough. Production is 24/7. Even if Panasonic wanted to they couldn’t sell to anyone else. I don’t know what kind of price negotiations they have, but current battery production is not profitable. This I know. Also, Panasonic just partnered with Toyota to produce batteries for all their EV’s. Additionally, the Gigafactory is just 1 battery production location. Panasonic has many. Some in the USA, and others in Asia. They sell their batteries to many companies. Just not the same ones they’re making for Tesla.
umeshunni 8y ago
Tesla's long rumored price point is $100/kWh (https://insideevs.com/tesla-cheapest-battery-pack-costs/ https://insideevs.com/tesla-cheapest-battery-pack-costs/) and these cars are presumably 60kWh, so ~$6k for the battery.
- AdrianB1 8y ago
  That is a target or prediction, not current cost, but still your $6,000 is much closer to reality than $20,000.
  - umeshunni 8y ago
    It looks like at the cell level, they're close to $100/kWh and expect to be there at the pack level by 2020. > In a rare disclosure of Tesla’s battery prices, Musk said in June that his company’s costs for battery cells—the small cylindrical components of its battery packs—had dropped to $110 per kilowatt hour (kWh) and would reach $100 per kWh by the end of 2018. That compares with an average price of about $127 per kWh industrywide.
deleted 8y ago
[deleted]
srcmap 8y ago
Love to see any estimate of battery cost trends for next 3-10 years.
tosbalok 8y ago
> There are 7,700 cells in a standard battery pack. Wikipedia[1] says there are 2,976 in the mid-range pack and 4,416 cells in the long range pack. If the short range has perhaps 2500, that's $6250 [1]https://en.wikipedia.org/wiki/Tesla_Model_3 https://en.wikipedia.org/wiki/Tesla_Model_3
tranchms 8y ago
Correction: 7,100 for 85kw, and 8,250 in the 100kw Model S And it looks like 4,400 in the Model 3

cjbprime 8y ago

$2.50 at what volume? Are you saying that's Tesla's cost, or someone else's?

tranchms 8y ago
I think they’re doing about 3.5 million cells a day. The final production target is 10 million, from what I remember.

aaomidi 8y ago

Maybe its cheaper to make the batteries in China?

outworlder 8y ago
Doubtful, otherwise the Gigafactory would make little sense.
- aaomidi 8y ago
  I said it'd be cheaper, not more expensive.

dymk 8y ago

Where are you getting the $2.50 number from? I'd imagine they're banking on cost savings via mass producing cells themselves, and improvements in the rest of their supply chain as demand for batteries goes up.

11thEarlOfMar 8y ago

They manufacture their own batteries in their Gigafactory outside of Reno, NV. They make more Li Ion batteries than any other battery manufacturer. Their batteries cost less than $2.50. https://electrek.co/2018/11/20/tesla-gigafactory-battery-cells-made-cost-advantage-panasonic-lg-report/ https://electrek.co/2018/11/20/tesla-gigafactory-battery-cel...

Someone 8y ago
I can’t easily find a description of how this partnership works, but I think “Panasonic makes batteries in Tesla’s building, and Tesla packs them together for use in their cars” is a better description. If so, I would expect at least some of that better margin will flow into Panasonic’s pockets (what part, I wouldn’t dare even guess)
- nickik 8y ago
  The problem is that the battery IP is owned by Tesla at least in part. So its not Panasonic producing Panasonic batteries in a Tesla building but rather its Panasonic building Tesla batteries in Tesla building. Panasonic could not just sell these same batteries to others.
  - greglindahl 8y ago
    Apple has a similarly complicated relationship with a lot of their subs.
  - tranchms 8y ago
    That’s not correct. Panasonic owns the IP for these batteries. They have a contract with Tesla to produce for them, but Tesla’s demand is so high they can’t produce enough. Production is 24/7. Even if Panasonic wanted to they couldn’t sell to anyone else. I don’t know what kind of price negotiations they have, but current battery production is not profitable. This I know. Also, Panasonic just partnered with Toyota to produce batteries for all their EV’s. Additionally, the Gigafactory is just 1 battery production location. Panasonic has many. Some in the USA, and others in Asia. They sell their batteries to many companies. Just not the same ones they’re making for Tesla.

umeshunni 8y ago

Tesla's long rumored price point is $100/kWh (https://insideevs.com/tesla-cheapest-battery-pack-costs/ https://insideevs.com/tesla-cheapest-battery-pack-costs/) and these cars are presumably 60kWh, so ~$6k for the battery.

AdrianB1 8y ago
That is a target or prediction, not current cost, but still your $6,000 is much closer to reality than $20,000.
- umeshunni 8y ago
  It looks like at the cell level, they're close to $100/kWh and expect to be there at the pack level by 2020. > In a rare disclosure of Tesla’s battery prices, Musk said in June that his company’s costs for battery cells—the small cylindrical components of its battery packs—had dropped to $110 per kilowatt hour (kWh) and would reach $100 per kWh by the end of 2018. That compares with an average price of about $127 per kWh industrywide.

deleted 8y ago

[deleted]

srcmap 8y ago

Love to see any estimate of battery cost trends for next 3-10 years.

tosbalok 8y ago

> There are 7,700 cells in a standard battery pack. Wikipedia[1] says there are 2,976 in the mid-range pack and 4,416 cells in the long range pack. If the short range has perhaps 2500, that's $6250 [1]https://en.wikipedia.org/wiki/Tesla_Model_3 https://en.wikipedia.org/wiki/Tesla_Model_3

tranchms 8y ago

Correction: 7,100 for 85kw, and 8,250 in the 100kw Model S And it looks like 4,400 in the Model 3