This year Tesla lithium-ion battery prices are less than $100/kWh

June 12, 2018

Tesla CEO Elon Musk said at a shareholder meeting on June 5 that Tesla is expected to surpass the $100/kWh lithium-ion battery cost barrier later this year.


Musk also stated that Tesla will break through the $100/kWh cost barrier for battery packs within two years. Tesla installed and deployed 1 GWh of energy storage projects around the world, and will soon deploy another 1 GWh of energy storage projects.


Musk always likes to post some important announcements. In a conference call with analysts in May this year, he stated that Tesla will announce a "giga-scale" energy storage project within a few months, and that such a project is equal to Tesla since 2015. The scale of all energy storage projects deployed since the year.


Musk said at the shareholders meeting that breaking the $100/kWh cost barrier for lithium-ion battery cells would be an ambitious goal. If it is successful, it may become a contributing factor to the larger-scale adoption of electric vehicles and energy storage projects, but some analysts believe that the time of implementation is uncertain.


Mitalee Gupta, an energy storage analyst at GTM Research, said, “We are not sure that Tesla will achieve this year’s target of US$100/kWh.” And GTM’s estimation of fixed energy storage prices uses rack prices. Instead of battery prices, the rack price for 2018 is set at around $207/kWh, which means its battery price is less than $207/kWh. The rack is usually a battery pack. GTM did not announce its predicted battery price.


Although lower battery costs can translate into lower installation costs, it is not so significant. Gupta said that at the battery level, battery costs account for 75% of the total cost. At the rack level, the cost of the battery as a percentage of the overall cost is even lower because battery rack prices also include battery management software, packaging, and electronics.


Gupta also pointed out that Musk’s claim is not very specific. For example, its goal of $100/kWh is only for the battery material or the battery as a whole, which is not explicitly stated.


Despite this, battery prices are still the main driver of the cost of battery energy storage systems, and the main driver of battery price decline is the growth of electric vehicles. Gupta said it is clear that most of the demand for batteries comes from the growth of electric vehicles, and the energy storage industry has been able to use this cost curve.


Tesla is also striving to expand its market and keep its promise. The company did not complete the production of electric vehicles in April this year, and Musk promised to produce 5,000 Model 3 electric vehicles per week before the end of June, higher than the current agreement. 500 vehicles.


Musk stated that he was optimistic about achieving this goal and admitted that he would face the problem of procrastination and that he would not always be able to fulfill his promise on time. "This is where I want to improve," he said.


According to reports, Tesla’s share price rose by nearly 10% on June 6th, as the shareholder attempted to cancel his position in Tesla and Musk was spared.


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