Tesla Motors will raise $500 million to accelerate gigafactory batteries and the revolutionary 100 kWh utility scale battery Powerpack with $250/kWh pricing

Telsa Motors announced that it intends to offer, subject to market and other conditions, $500 million of additional shares of common stock in an underwritten registered public offering.

Elon Musk, Tesla’s CEO, intends to purchase $20 million of common stock in this offering at the public offering price.

Tesla intends to use the net proceeds from this offering to accelerate the growth of its business in the United States and internationally, including the growth of its stores, service centers, Supercharger network and the Tesla Energy business, and for the development and production of Model 3, the development of the Tesla Gigafactory, and other general corporate purposes.

Tesla Utility 100 kWh powerpack has a breakthrough $250/kWh price.

Analysts had predicted batteries might reach the $350 point in 2020. However, Tesla announced the new battery prices May, 2015.

At Tesla’s price, utility-scale batteries have the potential to perform better than 2 cents per kilowatt hour where it counts the most: on the customer’s electric bill.

Zachary Shahan at Cleantechnica had a chart with some comparisons of possible near term utility scale battery product prices.

However, Ramez Naam estimates the Powerpack’s cost per kWh will be 7¢.

InsideEVS had coverage as well

Tesla utility units come in 100 kWh “battery blocks” and start in total capacity from 500 kWh up to 10 MWh+.

Tesla Energy For Utility Is Infinitely Scaleable

Scaling up Lithium and the battery supply chain

Even before Tesla’s gigafactory – and its rivals – entered the picture, global lithium consumption had doubled in the decade before 2012, driven largely by its use in lithium-ion batteries for cell phones and power tools. Then electric cars hit the scene in earnest, further boosting demand for lithium, while Tesla’s gigafactory is expected to use up as much as 17 percent of the existing lithium supply.

We are on the edge of a profound competition over batteries as Tesla drives down lithium-ion battery production costs, lowers the benchmark and increases cost competition. The response will be new entrants to this market, and competing battery gigafactories.

Tesla’s competitors will make this one of the biggest battles of the century-a battle the entirely depends on lithium supply. Tesla’s biggest rival will likely be Build Your Dreams (BYD), the Chinese automaker backed by Warren Buffet. Already, BYD is building electric buses on American soil and has global gigafactory ambitions. By the end of the year, according to Reuters, BYD should have 10 GWh of battery production capacity, which it expects to increase to 34 GWh by 2020 with a new factory in Brazil-about the same capacity as Tesla’s.

Not all lithium is equal. It’s sold in different types for different prices. For instance, lithium carbonate sells for around $ 6,000 per ton and is used to make some of the materials for new battery technology. However, many of the new battery technologies-particularly those used by Tesla-use lithium hydroxide as the starting material, which trades at around $ 2,000 more per ton than lithium carbonate.

Lithium found in salty water, or brines, is by far the most cost effective. According to Dr. Robinson, “brine is the best way to produce lithium because it’s so cheap, as nature has done all the hard work in rendering the lithium into a form that is easy to extract from the ground. All you have to do is drill a few wells and pump the liquid brine. “

There are only a few places in the world where lithium is present at high enough concentrations in these salty brines and the most famous is in the Atacama Desert, in the “Lithium Triangle” of Bolivia, Argentina and Chile. Supply here is Threatened by corruption and Politics , making it Difficult to capitalize on burgeoning Demand.

If Batteries are to address all of the global grid and utility time shifting for wind and solar then many TWh of batteries would be needed.