Tesla claimed that producing a new tabless battery cells will dramatically reduce the cost of the company's battery cells and packs, ultimately reaching the company's goal of producing an affordable electric car at about $25,000.
Yes, Tesla has a new price goal that will make electric cars roughly the same price as combustion engine ones. CEO Elon Musk made the announcement during the Battery Day 2020 event on September 22 at Tesla's largest facility in Fremont.
However, back in 2018, Musk has already predicted to dramatically reduce the costs of Tesla electric cars to $25,000 within three years.
Already two years after, the average electric vehicle price of in the United States has been dropping from $64,300 in 2018 to $55,600 in 2019 for Tesla Model 3. However, it is still pricey compared to the average price of $36,600 for fossil fuel-powered vehicle.
It has been Tesla's goal to produce affordable electric vehicles that the average mass can pay for. The Model 3 was first to be Tesla's mass-produced car, but Musk's plan to sell it at $35,000 did not come true because of production issues. Currently, the cheapest Model 3 Standard Range Plus is priced at $37,990 while the Performance models starts at $54,990.
To achieve a $25,000 car, there is so much that needs to be done, but it would be possible within the next three years. "This is always been a dream from the beginning of the company," said Musk adding that the $25,000 vehicle will be very compelling and fully autonomous.
Most of the price is actually based on the battery and production cost. Tesla aims to reduce the production cost throughout the production process and Musk rolled out the company's plan to reduce the cost per KWh by half.
Depending on their capacity, current battery packs cost approximately $10,000 to $12,000. Reducing battery prices could be the key to producing cheaper electric vehicles that have higher volume. Tesla aims to reduce battery cells to less than $6,000.
Musk said that by producing new "tabless" batteries as well as by replacing the materials inside the cell will reduce by half the price per kilowatt-hour. If a lithium-ion battery cell costs about $100/kWh, a battery pack with its additional components like its cooling systems could cost at least $125/kWh.
Over the last decade, prices have dramatically dropped by 87% from $1,100/kWh in 2010 to $156/kWh in 2019. However, Musk said Tesla will kick off a three-year process to bring the price by 56%, below the experts' forecast of $100/kWh by 2023.
How will that be possible?
The new tabless battery cell design will reduce the cost by 14% while also reducing the cost in cell factories by 18%.
To further the cost efficiency, Tesla will now be maximizing the use of its resources by developing a technology to incorporate anode materials in the production, which will reduce the cost of production by 5%.
Tesla will also produce its own cathode materials to reduce the cost by 12%. Tesla announced that it earned rights to extract lithium over 10,000 acres of property in Nevada, so the company will be extracting the materials from the core, which will be enough to supply for all its North American factories.
Tesla will be building cathode facility where the process will be much simplified to reduce the investment cost by 66% and process cost by 76% while eliminating waste water, which is good for the environment. Also, Tesla will be investing on a new battery recycling facility as the company aims to develop battery cells from old ones in the future.
Finally, Tesla has developed its own high-pressured die-cast alloy aluminum to produce the front and rear parts of the vehicle as a single piece. Similarly, the battery will now serve both as an energy device and the structural form that would reduce 7%of the cost.
However, it will take at least 18 months to see the realization of this plan and about three years to fully see the cost
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Written by CJ Robles