http://seekingalpha.com/article/3936476-tesla-gigafactory-challenge Tesla: A Gigafactory Challenge Feb. 26, 2016 Frank Greenhalgh
[images https://staticseekingalpha.a.ssl.fastly.net/uploads/2016/2/3860661_14564468182045_0.jpg The Tesla Model S Battery Pack (uncovered) https://staticseekingalpha3.a.ssl.fastly.net/uploads/2016/2/3860661_14564468182045_2.png singular unit Bolt Battery Pack ] In 2014 Tesla announced the "Gigafactory," the answer to high battery prices. The Chevrolet Bolt demonstrates the advantages of prismatic cells. Fewer cells, easier to cool and cheaper. Tesla should consider also manufacturing prismatic cells in the Gigafactory for the Model 3. The Gigafactory In their December 2014 10-Q report, (page 11) Tesla announced: We believe that the Tesla Gigafactory will allow us to achieve a major reduction in the cost of our battery packs of greater than 30% on a per kWh basis by the end of the first year of volume production of Gen III. The total capital expenditures associated with the Tesla Gigafactory through 2020 are expected to be $4-5 billion, of which approximately 2 billion is expected to come from Tesla. True to form, Tesla had decided to vertically integrate further, by manufacturing their own batteries. At that time battery pack prices were approximately $300/kWh, so a 30% saving would reduce the costs to $210 a kWh. The Model 3 will probably use a 50kWh battery, which in 2014 would cost $15,000, and after the Gigafactory less than $10,500. This savings is supposed to allow a Model 3 design to sell for $35,000, making it competitive with the BMW 3-series. While Tesla is building a Gigafactory to manufacture cylindrical cells by the millions, all other EV manufacturers have decided to use prismatic battery cells, supplied by LG or Samsung (OTC:SSNLF). The reasons were revealed with the introduction of the Chevrolet (NYSE:GM) Bolt. The prismatic cells offer a cheaper, lighter, solution to EV battery design threatening the value of the Gigafatory and even the competitiveness of the Model 3. The Battery is KIng The heart of any electric vehicle is its battery. It is the most expensive (and heaviest) component of any EV, and it dictates what the range and performance of the car will be. Up to now no BEV, except the Tesla Models S & X, have had a range of over 200 miles. This is only possible because the battery packs on the S and X are huge, cost around $22,000 and weigh 1,300 lbs. The pack uses the same concept used for the Roadster in 2004. Thousands of small cylindrical cells placed in an isolated liquid cooled (or heated) environment. Present Competition The present EV competition, such as the Nissan (OTCPK:NSANY) Leaf and the BMW i3 have ranges of less than 100 miles. Instead of using larger batteries, many automakers add a small internal combustion engine to charge the battery, increasing the range, but not the performance. These hybrid cars, such as the Chevy Volt and the BMW i3REX, have received good reviews, however they do not qualify as compliance cars, and are missing the benefits of pure EVs performance. The Chevrolet Bolt The Chevy Bolt, a pure EV that GM developed in concert with LG is the first non-Tesla EV with a claimed range of over 200 miles. The Bolt will be priced at $38,000 ($30,500 after a $7,500 rebate). How did Chevy/LG get the battery price down? The answer is Prismatic cells, which are cheaper than cylindrical cell battery packs. The first Li-ion batteries were cylindrical and used in toothbrushes and laptops. As the demand for long battery life on cell phones and thin laptops increased the "Prismatic" cell was developed. Cell Types Prismatic cells were originally designed for areas where cylindrical cells are too wide, such as iPads, iPhones, and thin laptops. LG now has developed Polymer Prismatic pouch cells especially for EVs. Prismatic batteries have advantages over the cylindrical battery packs. They are lighter in weight than the equivalent cylindrical cell battery packs. They can produce more energy per cell; they can be cooled through a heat sink rather than liquid cooling each cell. They also are cheaper than cylindrical cell battery packs. The cylindrical cells battery packs require liquid cooling and a single completely sealed enclosure. The Bolt battery pack is 50kWh and requires only 280 pouch cells. The Model S 70kWh Battery pack requires 6800 cells! The Bolt cells can be distributed in different areas of the auto whereas the Tesla pack is a singular unit The Gigafactory The purpose of the Gigafactory was to reduce battery costs by virtue of quantity produced. It now appears that if Tesla continues to build the cylindrical cell battery packs they will not have a price advantage with the Model 3. They might consider manufacturing prismatics in the Gigafactory. Panasonic is building a prismatic factory in China so they already have the ability to make the change. The Bolt is only the first EV to use the LG batteries, LG claims to be sourcing these batteries to 16 companies making EVs or HEVs. Conclusion Tesla has been using the same battery pack design using cylindrical cells since 2004. Cylindrical cells are now obsolete. The industry has developed prismatic cells, which are less expensive to make, easier to cool, and available to all auto companies. Tesla should consider designing the Model 3 battery pack using prismatic cells and producing them in the Gigafactory. Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks. [© 2016 Seeking Alpha] For EVLN EV-newswire posts use: http://evdl.org/evln/ {brucedp.150m.com} -- View this message in context: http://electric-vehicle-discussion-list.413529.n4.nabble.com/EVLN-Batteries-are-King-A-Gigafactory-Challenge-tp4680720.html Sent from the Electric Vehicle Discussion List mailing list archive at Nabble.com. _______________________________________________ UNSUBSCRIBE: http://www.evdl.org/help/index.html#usub http://lists.evdl.org/listinfo.cgi/ev-evdl.org Read EVAngel's EV News at http://evdl.org/evln/ Please discuss EV drag racing at NEDRA (http://groups.yahoo.com/group/NEDRA)
