Battery Advances , Gigafactory Offer Enormous Potential For Tesla


Model S Image Credit : Tesla

Model S
Image Credit : Tesla

The Motley Fool seemingly issues a story about Tesla Motors every six hours, and who can blame them.  Tesla is one of the most fascinating corporate stories ever, even without the tie to SpaceX. Nevertheless, the two have been linked heavily this week in the disputed story regarding SpaceX financing.  As Tesla’s stock continues to rise, Elon Musk’s net worth does as well. Who knows? One day a significant portion of that worth may just fund the human mission to Mars.

In the meantime, what Tesla is doing here on Earth is nearly as interesting, and two Fool stories out today, when taken together capture the scope of change underway. There is also a very significant lesson regarding the value of basic scientific research funded by the Federal government.

The first story ponders whether or not the Gigafactory, Tesla’s attempt to cut its lithium ion battery costs by at least 30% may be a very big deal.

Credit: Tesla

Credit: Tesla

From the story:

“Understanding the potential of Tesla’s Gigafactory begins by getting one important item, which management has repeatedly emphasized, correct. Thirty percent is not the ultimate goal of lithium-ion cost cuts. Instead, it is the bare minimum that Tesla expects to achieve with the Gigafactory in the first year of Model 3 production.”

and then regarding a conference call with Deutsche Bank

“Not only does Tesla view 30% cost cuts to its batteries as conservative, but Musk said during the second-quarter call that he would be “disappointed if it took us 10 years to get to $100 a kilowatt-hour pack.” Since Tesla hasn’t shared exactly where its costs are today, it isn’t clear what percentage of a cut that $100 per kilowatt hour is to today’s cost, but as Deutsche Bank analyst Rod Lache noted during the call, it is low enough for Tesla’s electric vehicles to reach cost parity with — and possibly even improve upon — the cost of an internal combustion vehicle.”

It goes on to note that even though Tesla is closely watching for breakthroughs in battery technology, it isn’t counting on any of them to reach the cost figures it projects for the mass market  Model 3 car it plans to introduce in 2017 as the Gigafactory goes on line. Ponder if you will for a moment, the sea change which may be coming in the automotive industry, the backbone of American transportation, in the very near future if Tesla maintains its quality while reducing its prices to a competitive level with much of the internal combustion market.

The other story focuses on the possible implications of actually achieving a breakthrough in battery technology, and the role the Argonne National Lab is playing in performing some of the research.  What stands out is the observation that it was prior Federally funded research into lithium ion batteries back in the 1990’s which led to the current status quo. If researchers can solve a charging problem, new and even lighter batteries are possible which could offer quadruple the capacity of the best units out today.

Pair it with any meaningful advance in the capacity to capture and store solar energy on the local (home) level for recharging the car at night, and what emerges is the potential to drive your car at minimal or even zero fuel cost for much of the year, without any carbon emissions. The potential change is truly monumental. And if you no longer have to stop by and fill up at the Rob N’ Run anyway, who’s going to be paying $7 for a gallon of milk and a Mountain Dew?

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