Despite the 270-mile EPA-approved range of the Tesla Model S 85D and the fact that even shorter-range electric cars like the Nissan LEAF can travel far enough on a single charge to satisfy the daily driving requirements of most consumers, EVs are often criticised for having limited range.
Unless they can travel as far between recharging as most modern gasoline cars and refuel just as quickly, the stubbornest of critics say, consumers just won’t make the switch to electric. Unconvinced of the speed of development in the plug-in world, these harbingers of electric car doom suggest the likelihood of either happening is very small indeed.
But according to Tesla CEO Elon Musk, who we’d argue should know with a fairly accurate degree of accuracy what the development curve of lithium-ion battery cells is, electric cars with 500-mile ranges will be on the market within the next ten years.
As GreenCarReports details, Musk made the comments last Friday at the 2015 Barron’s Investment Conference, at which he talked about the growth of the electric car industry as well as his own personal hopes for Tesla in the future.
Given the nature of the conference, much of Musk’s discussion revolved around the affordability and practicality of battery technology. Alongside touching base on Gigafactory development and plans for the facility in Reno, NV, Musk disclosed that Tesla is keeping a keen eye on global developments in battery cell technology, a subject which we’d assume is of extreme importance to the average investor.
“At this point we have quite a good understanding of the battery types in the world,” he said. “If someone invents something, the obvious [company to] license it to is Tesla,” adding that Tesla is currently the largest consumer of lithium-ion battery cells in the world.
“We track around sixty different efforts around the world [which are developing new battery cells],” Musk continued. “Some hold long-term promise. We rate them from 1 to 5, where 5 is ‘we should be doing business with them,’ and 1 is complete BS”
Currently, Musk said, there are no companies which Tesla views as being worthy of a 5-rating, but there are several companies which Tesla has rated as ‘3’. Some of those, he suggested “could go from 3 to 4” in the near future and as such, “we’ll be looking to start preliminary talks.”
Like other automakers, Tesla is keen to push the range of its vehicles upwards in the coming years so that its all-electric vehicles can realistically cover the same distances on a single charge as a comparable gasoline or diesel-powered vehicle. But while Tesla has the capability to offer a 500-mile electric car right now, Musk said, there would be too many compromises.
“We could absolutely do that right now with the current batteries [we have],” he explained. In order to do that however, Tesla would have to dramatically increase the sticker price of its vehicles and severely limit the interior space, sacrificing the Model S and Model X’s famous luggage space to store the additional battery cells needed to yield 500 miles of range.
Given the development speed of lithium-ion technology and the way in which energy density and power density of cells is likely to improve, Musk said that a 500-mile electric car which used the same physical battery pack space as Tesla’s current Model S battery pack wasn’t too far away. While Musk seemed confident in his prediction however, he noted that the commercial success of such a car would be dependent on reducing cost per kilowatt-hour so that a 500-mile pack in ten years costs no more than today’s 250-mile pack.
“A 500-mile range car in the current form factor? I think that’s probably less than 10 years away with roughly the same volume and mass,” he said. “The really important thing is reducing the cost per kilowatt-hour. We are going to make some technology improvements to the cell chemistry and certainly to the way the battery modules and packs are organized. But the fundamental focus is on cost per unit of energy. That’s what the Gigafactory is about. It’s taking economies of scale as far as we can possibly imagine to a very extreme level.”
Asked if the Gigafactory would help reduce the cost of cells to $100 per kilowatt-hour — a figure that has long been acknowledged by industry experts as being the point at which electric cars become a no-brainer for both the automotive industry and consumers — Musk declined to comment on specifics, but indicated that $100 per kilowatt-hour was “in the ballpark of what we’re aiming for” when discussing Tesla’s Gigafactory.
“It’s important to cut the cost by at least 30 percent per kilowatt hour with the Gigafactory, and our aspiration of course is to do a better than 30 percent cost per kilowatt-hour reduction.,” Musk said. “In order to achieve the 50 percent cost reduction for the Model 3, which is about a 20 percent smaller car and so would require for the same range 20 percent less energy, that means to get to the 50 percent we’ll need another 30 points coming from economies of scale — which I’m very confident we’ll achieve.”
Unlike other automakers, which are using third-party suppliers and traditional production techniques to obtain their battery packs, Musk explained part of the Gigafactory’s cost-cutting will come from having everything under one roof. At the moment, he explained, materials used in lithium-ion battery cells can travel around the world “three or four” times before finding themselves in an electric car.
“We’ll have train cars of raw materials arriving from the mines and at the other end out will come completely finished battery packs,” he explained, a process which will not only save Tesla money but also give it better control over the entire manufacturing process and lower carbon emissions for the production process too.
Combined with planned expansion and its Model 3, Musk added that the Gigafactory would soon make it possible for Tesla to easily increase production to millions of cars per year, something which would move Tesla from a niche-market automaker into the mainstream automotive world extremely quickly.
Tie that in with its Tesla Energy storage products — which aim to help society use and store renewable energy for commercial and domestic use — and it starts to become clear that should Tesla succeed, the way we think about transportation will change very dramatically indeed in a very short time.
The only dilemma facing us now? What to call this new golden age.
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