Back on March 30, Tesla CEO Elon Musk made an announcement on Twitter (as has become customary) announcing yet another official Tesla Motors [NASDAQ:TSLA] launch event. Set for April 30 at Tesla’s Hawthorne Design Studio in California, Musk promised that the new Tesla product line would be something other than a car, causing the Internet to erupt with speculation over what it could possibly be.
Major new Tesla product line — not a car — will be unveiled at our Hawthorne Design Studio on Thurs 8pm, April 30
— Elon Musk (@elonmusk) March 30, 2015
We, like many other news outlets, opted to predict the event would finally unveil a pet-project Tesla has been known to be working on in plain sight for some time with Solar City: a wall-mounted domestic battery pack designed to provide grid-smoothing and backup capabilities to the home.
Now Bloomberg is reporting that’s exactly what we’ll see on April 30, as well as a large-scale utility version of the same battery designed for industrial grid-connected use.
The news comes courtesy of an email sent out on Tuesday to investors and analysts by Jeffery Evanson, Tesla’s current head of investor relations, in which he detailed the new wall-mounted home battery and “very large” utility-scale battery packs that Tesla will unveil in just over a week’s time.
Sadly, we don’t have the email to share with you, but Bloomberg claims the Evanson says in it that Tesla “will explain the advantages of our solutions and why past battery options were not compelling.”
While grid-connected battery storage solutions and backup systems have existed for a while, they have traditionally relied on large, heavy lead acid battery packs rather than lithium-ion battery packs. With the advent of modern lithium-ion battery packs and the need to recycle electric car battery packs after they have served their useful life in a car, we’ve seen a variety of projects and solutions that use new lithium-ion as well as used electric car lithium-ion battery packs to offer grid smoothing and backup capabilities.
As far as we know, not a single one of these uses the consumer-grade cylindrical 18650 form-factor lithium-ion cells that Tesla uses to make its electric car battery packs. Tesla’s units invariably will.
And that’s an important thing, because just like its electric car battery packs, we’d guess a Tesla-brand wall-mounted electric storage unit will be made of thousands of small-capacity 18650 cells. Connected together in small clusters or ‘bricks’ which are connected in parallel before being strung together in series as ‘sheets’, Tesla’s battery pack design means that the pack can continue to function without any problems even if one or two of the individual cells have failed. And since the cells themselves are relatively cheap, Tesla can replace faulty ‘bricks’ easily and cheaply without a large repair bill.
In battery packs where high-capacity cells are simply connected in series, a single cell failure can bring an entire battery pack to its knees.
Obviously, we’re still using what we know of Tesla’s automotive lithium-ion battery packs as a way of predicting what we’ll see next Thursday in its consumer and industrial static battery packs. Given Tesla’s massive $5 billion investment in its Gigafactory in Reno, NV however, it makes sense that Tesla’s static battery packs will duplicate much of the Tesla Model S lithium-ion battery pack operation and design as possible to keep costs low.
Like previous Tesla announcements, Tesla hasn’t given much official word on what to expect on Thursday. But based on Elon Musk’s promise back in February during the Q4 2014 earnings call, combined with what we know of the Tesla-built lithium-ion battery backup system being tested by Solar City right now, we’ve got a good idea of what to expect.
(For those who are unaware Musk, in addition to being CEO of Tesla Motors and SpaceX, is also Chairman of Solar City.)
As for specs? That’s a big unknown, but if the prototype being tested by Solar City is representative of a finished product, expect a 10 kilowatt-hour storage system capable of running essential domestic appliances for more than a week as well as full home-automation, GMS, and Can connectivity. This in turn means that it could be used with any number of different brands of modern solar panel systems and grid-tied smart home systems.
Price? That’s even tougher. If we had to guess, we’d predict those buying a domestic battery will have little change from $5,000 for a 10 kilowatt-hour pack and $8,500 for a 20 kilowatt-hour pack. That’s using a generally-accepted price of $300 per kilowatt-hour, plus some healthy overheads to account for the extra on-board power electronics, communications systems, and profit.
Given Tesla’s tendency to favour leasing rather than outright purchases, we’re guessing a lease deal will be the preferred way.
For that, expect Tesla to offer a low monthly lease rate in exchange for getting a kickback from local utility companies only too grateful to see excess capacity placed into the grid for peak periods.
Until next Thursday however, we’re playing the waiting game just as much as you are.
Watch this space.
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