Tesla Current 10-30% Battery Cost Advantage is Still Improving

Cairn Energy Research Advisors reports that Tesla has the lowest cost batteries by at least 10% and over 24% versus other car companies. This is before the cost reductions that Tesla is implementing from 2020 Battery Day.

Tesla currently pays an average of $142 per kilowatt-hour (kWh) for battery cells purchased from its three suppliers: Panasonic, LG Chem and CATL. By comparison, GM pays an average of $169 per kWh for its battery cells while the industry average runs at about $186 per kWh.

Cairns data estimates that Tesla’s battery packs cost, on average, $187 per kWh while GM’s packs cost $207 per kWh and the auto industry spends an average of $246 per kWh for battery packs.

Rob Mauer of Tesla Daily has data to infer that Tesla has a battery cell cost of $98 per kilowatt-hour. Tesla executing on the Battery Day would get the costs to $50-55 per kilowatt-hour.

GM is seven years behind Tesla in building a lithium ion battery plant. Ultium Cells, a joint venture between General Motors and LG Chem, will mass-produce Ultium battery cells at the facility to advance the push for a zero-emissions, all-electric future. GM and LG Chem are investing $2.3 billion.

The GM-LG Chem battery factory will be completed in 2022 and will ramp up to make 30 GWh/year of battery cells.

In 2015, Tesla and Panasonic completed the Nevada Giga battery factory.

Tesla that should be producing 10 GWh/year pilot plant for new 4680 cells starting by the end of 2021. Tesla will be building 100 GWh/year battery factories at its new Berlin and Texas factory.

LG Chem, CATL and Panasonic are working with Tesla on new 4680 battery cell lines. Those new batteries will reduce Tesla battery costs even faster than competing car company battery cost reductions.

SOURCES – CNBC, Cairn Energy Research Advisors
Written by Brian Wang, Nextbigfuture.com