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Anderman report on Tesla’s battery prospects with the Gigafactory

In his new “Tesla Battery Report”, Dr. Menahem Anderman, independent battery expert, consultant and head of the Advanced Automotive Batteries conferences and publications, concludes that with the planned Gigafactory (earlier post), now targeted for Nevada, (earlier post), Tesla may succeed in accomplishing what the US Government failed to achieve—i.e., to establish a domestic Li-Ion battery industry.

However, there remain a number of questions and risk factors associated with the project for Tesla, Anderman notes, including profitability, participation of materials suppliers, and macro trends in the market such as demand, the continuation of government subsidies, competitive battery technology and the role played by ZEV credits.

Anderman projects that Tesla and Panasonic will most likely reach an agreement for a staged investment approach by Panasonic—e.g., 5- to 10-GWh plants at a time. Based on his analysis of materials, assembly and costs, Anderman suggests that Tesla will not see much cost reduction from the Gigafactory until 2018 or later.

“The supply chain cannot ignore a company that became the largest user of Li-Ion batteries in the world overnight and is planning a 20x expansion in 5 years.”

Battery cost will go up slightly in 2017 due to high depreciation charges, but larger capacity per cell will neutralize the increase by 2018, Anderman suggests.

Anderman thus suggests that the price of the 2017 new model will be in the range of $50-80k—the market segment of sporty mid-luxury sedans such as the BMW 5 series.

However, a pack cost much below $200/kWh is unlikely before 2020, Anderman concludes. This would bring the proposed 70-kWh pack for a 200-mile D class EV cost to (or above) $14,000—or 40% of the proposed Model-3 vehicle base price of $35k. While Tesla could offer an entry-level version with 50 kWh (at close to $10k per pack), such a vehicle would not quite attain 200 miles per charge, Anderman concludes.

“Tesla-Panasonic’s current cell offers specific energy 50% higher than the competition. This is primarily due to the use of highly reactive NCA cathodes and high-density electrodes. The gap will shrink to 20-25% in the next 3 years.”

If the Gigafactory does realize 35 GWh or production, Anderman’s assessment finds that pack pricing for the 2025 time scale could be as low as $167/kWh—i.e.,$11,700 for a 70-kWh pack.

Annual sales, excluding China, will be significant, Anderman suggests—perhaps 150,000 cars by 2020—but short of utilizing the capacity of a 500,000-pack factory. If sales in China are significant, the total number may exceed 200,000 by 2020, but Tesla will have to shift some production there. Anderman notes that China is already demanding that Tesla invest in China sooner rather than later.

18650 cells vs. large format. Tesla famously has built its battery packs with thousands of 18650 format cells, rather than opting for fewer, larger format cells as major automakers have done. Tesla’s module design with many cells in parallel allows for single-cell failure without bringing the whole battery down. Current high-energy 18650 cells deliver 50% higher energy per unit weight than current large cells.

However, Anderman notes, as the industry gains more confidence, next-generation large cells for 2016-2017 will use more energetic materials in a better optimized package and will see energy density enhanced by 30%. The analyses of most automakers, supported by estimates from Korean battery makers, is that a pack based on a large pouch will achieve cost parity with the 18650 design in 2-3 years, with better potential for lower cost in later years.

Anderman projects that by 2018, the 18650 approach will only offer 15-20% better energy per unit volume and similar cost to that of the large-cell packs.

Anderman is offering a reduced rate on a 2-hour phone consultation for buyers of the Tesla report.

Comments

As Aha

so Model S with 60kWh is ok for 200 miles, but somehow smaller Model III needs 70...
I hope he does really reduced rates for this report

yoatmon

Perhaps this is something that Tesla should have a closer look at.
http://www.innovations-report.com/html/reports/energy-engineering/safe-lithium-batteries-with-a-long-service-life.html

Account Deleted

The 60kWh Model S is EPA rated at 208 miles. So a smaller Model III with a new generation motor and power electronics should be able to get at least 208 miles for its EPA rating using a 55kWh battery pack. However, I think Anderman is right about Tesla's price of 200 USD per kWh by 2020 at the pack level.

My bet is that Tesla will be able launch the Model III in 2018 for about 40,000 USD for the 55kWh edition and more for a version with a bigger battery pack. It will be just as fast as the Model S, no more than 6 sec form 0 to 62mph and no more than 4 sec for the performance edition of Model III. Blistering acceleration is something that people really want and it costs much less to deliver that feature in an electric car than in a car that uses a combustion engine. This is why Tesla can offer a Model III that cost less than a comparable car with an equally fast acceleration for its size and quality. You can still buy a combustion based car for less that 40,000 USD, of cause, but it will not be luxury and doing 0 to 62 mph in 6 sec. Tesla will sell this car as fast as they can ramp up production as there will be no one else in the market in 2018 to 2021 with a long-range performance car at that price level that is zero emission.

It is my hope that Tesla's success in selling the Model III will be an eye opener for the industry so that it starts focusing in earnest on BEVs instead of combustion based cars.

Davemart

I'm going to put it on record now that I think Tesla will come unstuck.

They got the drop on the other manufacturers by three methods:
1. Putting together 18650 cells to give better energy density which the other manufacturers did not fancy doing.
Incidentally this was not Musk's innovation, but the people he levered out from Tesla.
2. They run at a gross margin of 25%, which is trumpeted as being high compared to the likes of BMW.
Not at that price point it ain't, as margins there are more like 40%
3. They managed to raise huge amounts of capital although their real margins are low by endless hype, for instance the notion that they can build the model III at the same profit margins as the Model S, when typical margins for that class of car are maybe 11% or so, not at luxury car levels.

They continually talk about sales being supply, not demand limited.
In that case they would have been in real trouble had demand in Germany for instance reached the level they predicted, of 2-300 a week.
Actual sales in July were 26.

Demand in the US is flat:
http://insideevs.com/monthly-plug-in-sales-scorecard/

Demand in Europe ex Norway never took off, and even in Norway is now way down.

That leaves China as the only rabbit that can be pulled from the hat.

We will see if that exists with the September figures, although of course there will be much talk about their production pause.

My guess is that January will see that the sales have actually been around 30,000, not the 35,000 predicted, and that for all but those who are wilfully blind it will be clear that they are demand, not supply, limited.

This is however contingent on China, who of course if the legislature decides to could swallow any number of cars.

The Model X will in my view largely cannibalise Model S sales.

So it depends on how long the share price continues at its present stratospheric levels in the face of what in my view is likely to be extremely adverse data.

Of course in January poor figures will be brushed away by tales of how great they will be when the Model X is in full production.

Never underestimate the ability of a bubble to keep growing, but in my opinion it is unlikely to stay unpopped long enough for the Model III to hit production, or much of a hype-rfactory to be built.

I've been wrong before however, as although I did not say so I thought that the Model S was unlikely to see production, so we will see.

But there it is, I will nail my colours to the mast.

Davemart

Henrik:
They would need to change the battery chemistry to hit that kind of acceleration from that size pack.

The chemistry they use is low power, but the huge pack means that it can still accelerate very fast.

Even on a lighter car that will not be true to the same extent with a 55kwhh pack.

That is not to say that they won't be able to goose the power by tweaking the chemistry, but it seems to me that they can't just pop in the same pack in a smaller size and get that level of performance.

It would still be pretty poky though.

Account Deleted

Model S can do 0 to 62 mph in 5.9 sec using a 60kWh pack so doing the same in a significantly less heavy car using a 55kWh pack is no problem. The performance edition Model III doing less than 4 sec will only be sold with a larger pack say 75 kWh and 300 miles range EPA rated. For Model III Tesla will use another battery cell than the 3.1Ah they currently use in the Model S. Model X and Model III will use either the Panasonic 3.4Ah cell or the 4Ah cell or a slightly modified version of these cells see

http://www.greencarcongress.com/2009/12/panasonic-20091225.html

You are also wrong about poor demand for Tesla. Tesla is so far only limited by their ability to ramp up production. For instance, order today and you need to wait 4 months for delivery in the US. Abroad the waiting list depend on when a shipload arrives. Tesla also needs to allocate more cars to countries where they just launched sales in order not to get too much bad press about long waiting lists. So right now China and Japan are the priority.

Davemart

Fair enough on the acceleration.
I did not read carefully enough, although I did say it could be done, I just thought that they would have to tweak.

'Tesla is so far only limited by their ability to ramp up production. For instance, order today and you need to wait 4 months for delivery in the US.'

That is their story.
I don't believe it.
Here are some order dates and delivery dates for Tesla in the first quarter, the latest I could track down:
http://www.teslamotorsclub.com/showthread.php/25492-Model-S-Order-Delivery-Tracker-Q1-2014

As can be seen, they are all over the place, with some taking six months and some taking a month.

This looks to me more like the results of producing in batches than evidence of a massive consistent order backlog.

Account Deleted

Tesla's production is continuous apart from factory shout downs needed for repairs or retooling. Delivery is largely a batch process in order to save costs. You can hire a car carrier for lees per car transported from the US to Europe or China than it cost to ship in containers. Problem is that a car carrier is typical 6000 cars for each load. Also ordering 500 containers for car shipping at a time cost less than ordering 20 containers at a time in a continuous flow. Transportation is a batch process when the volume is as low as it currently is for Tesla. That will not change until the Model III goes into production. This is also why Tesla does not report monthly sales as to many people without any understanding of how it works will come up with all kind of false interpretations for variations in monthly sales. When Tesla is above about 200,000 units per year the monthly sales will be more constant and then they will publish these statistics on a monthly basis.

Davemart

So its a flow process but times from order to delivery vary from one month to six months?
And that is in the US, so they are not on a ship at all?

electric-car-insider.com

It's a bit incongruous to cite soft demand in the face of months-long backlogs and 20,000 advance orders (with $5,000 deposit) for the upcoming model X, which customers will not see for 1-2 years depending on their position in the queue.

What other automaker enjoys that level of demand?

Davemart

I did not say that demand was soft for the Model X.
I said that it is soft for the Model S in the US, and poor in Europe, with Chinese figures still to come.

I also said that the Model X will take a fair chunk out of Model S sales when it comes.

How many families will need both in their driveways?
Some, sure. But how many?

HarveyD

Tesla Model S-85 is number one in Norway (a rather cold country) and the fleet is growing fast.

China will certainly have the fast growing EV fleet before 2020. It may not reach the per capita growth found in Norway but it will bust total unit sales.

It would be wise for Tesla to build a large EV and co-located battery factory in China, where the world largest car market is.

A JV with local car + battery + Solar panels manufacturers could build a very large complex by end of 2017 or in time for 2018 models.

Brotherkenny4

Anderman is a self appointed expert and his predictions have been consistently wrong. He has a natural dislike for EVs actually and is shilling for California. I would not quote him or believe him. He has never done anything real except parrot the words that California politicians can use as evidence for a given stance. How about we listen to someone with actual real world experience in getting real things done. Self agrandissement is not an acheivement.

Account Deleted

Dave so an order by one customer is canceled in the last minute meaning another customer with that specific choice of options gets lucky and obtain his/her order after one month instead of 6 months. Also Tesla may get a good price for 500 containers to Europe if they can fill it on a particular day which they just can by delaying US sales etc, etc. You see my point is that real life business is messy and complicated.

Davemart

On current monthly sales VW is number one in Norway, not Tesla, whose sales have decreased considerably.

In China, what happens depends on the stroke a pen.
They have both indigenous electric vehicle sales with BYD and others, and long standing relationships with all the majors, who have often set up joint ventures.

Musk will have to show considerably more tact than he usually does if he is not to be out in the cold.

Many of the mandates for electric vehicles for instance in Shanghai currently exclude Tesla.

electric-car-insider.com

Variability in Model S deliveries are due to how they allocate. When I bought mine, I was quoted 1 month for P85, 2 months for 85, 3 months for 60.

I know people who were recently quoted 4 months, so clearly the queue shifts with the peaks and valleys of demand for any given month.

Unlike other manufacturers, Tesla builds to order, except for "inventory" cars they use to demo. There are no cars sitting on lots waiting for 90 day markdowns.

Smart.


Account Deleted

Musk launched Model S in China before he launched in Japan because he knows it is politically important to show some respect in that market. He also cooperates with Chinese companies and wealthy Chinese individuals to get the supercharging infrastructure up ASAP in China.

Your interpretation of the Norwegian EV statistics is ignorant and outright idiotic now that you have been explained how it works. You refuse to understand or perhaps you simply can't.

Davemart

For those confused by the distinctions being made here between batch and flow production, of course the line runs as continuously as possible.

However different batches of production can be allocated in different ways to ease both shipping and production issues.

So in the present case a batch may be allocated to China, Europe, the UK (rhd), or the USA.

If production is allocated on a per unit basis, then if your mate gets his car after two months, and you are told that you have to wait four, then it is reasonable to infer that demand has increased.

It is not so simple with allocated batches, as you may have simply missed the relevant batch.

So some customers having to wait a fairly long time does not necessarily indicate excess demand where there is batch production, or allocation if you prefer.

In fact if demand is low, then it may lead to longer wait times in some circumstances, for instance it may take longer to have enough orders to fill a container ship bound for Europe.

Davemart

Henrik:
If you want to discuss things in an adult manner,do so.
Cut out the playground name calling.

FYI I have not got a clue what you are on about regarding Norwegian EV statistics, as I can recall no discussion about them.

In any case, if you want to reply, have some manners or you will be ignores and reported.

HarveyD

How long will it take Tesla to catch up with demands?

Davemart

@Harvey:

They have now increased the capacity of their production lines, so by Christmas it should be obvious whether they are supply limited, as they say, or demand limited, as I argue.

Wait times are more complicated, so that even if they can easily supply all demand, deliveries to any particular market or of a particular version can vary depending on the factors mentioned above.

Account Deleted

Dave you seem to have a short memory. Perhaps you should read your own post at 8:36 AM this thread. When you badmouth Tesla you better be prepared for some heat because Tesla of all companies does not deserved to be badmouthed.

Davemart

Henrik:
Disagreement is a different matter to abuse.
Grow up or stop posting.
If Tesla is a religion to you not a car maker, go to church, not an EV forum.

You ranted:
'Your interpretation of the Norwegian EV statistics is ignorant and outright idiotic now that you have been explained how it works.'

When my post was:
'On current monthly sales VW is number one in Norway, not Tesla, whose sales have decreased considerably.'

In response to Harveys:
'Tesla Model S-85 is number one in Norway (a rather cold country) and the fleet is growing fast.'

I am aware of no 'discussion which explains how it works' there.

My statement was based on:
http://ev-sales.blogspot.co.uk/search/label/Norway

So Tesla sold 183 in August for a year to date of 3,431

VW sold 297 E-up cars in August for a year to date of 2,130
and: 467 E-Golf in August for a year to date of 925

Total VW: 764 in August for a year to date of 3,055
So my statement is perfectly true, as VW is now way above Tesla in monthly sales.

Tesla's highest month appears to have been in June, when they sold 536, still way below VWs combined total in August.

If you wish to reply, stay polite, or you will be ignored and reported.

Davemart

Henrik:
In addition, this is a discussion forum, not a venue for you to impertinently offer instruction.

So get arrogant notions that: 'You have been told how it works'
right out of your head.

This is a discussion group of your peers, not your acolytes.

You give your opinion.
That is all.

JMartin

Why all the discussion about Tesla sales. They opened their patents and other companies will adopt the battery packs at some level, so it is not just Tesla auto sales, it is BEV, HBEV sales that will count. They can sell the batteries if they make them.

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