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June 06, 2014

Elon Musk's Tesla will Need Hundreds of Giga Battery Factories

Through scale alone, Tesla hopes the gigafactory will bring down battery costs by 30%. A $175 per kWh battery would be "very competitive" with even a mass market vehicle, Langan writes.

Musk put things in even more stark terms: [Tesla Motors] won't be able to function at all if it doesn't build a gigafactory — and [Tesla] will ultimately need hundreds [of Gigabattery Factories] of them. "We can’t figure out any other way to scale," the Wall Street Journal's Cassandra Sweet quoted Musk as saying.

There are advances in battery technology. Lithium Sulfur and better lithium ion anodes and cathodes that can up the energy density and bring down costs towards $50 per kwh.

Hundreds of factories would be producing 100 Terawatt hours per year of batteries

Tesla Cost of Ownership is Already Very Good Relative to Regular Gas Cars

There is cost of ownership analysis here

About $10,000 to 13000 cheaper over 5 years and $20,000 to 30000 cheaper over ten years






Ford and Samsung are putting lithium ion batteries into 70% of all new Fords. This will enable regenerative braking and lighter components. Eventually separating air conditioning to all electric. This could up fuel efficiency by about 10%.

I have discussed what a "battery singularity" would look like.


Batteries (and electric engines) that replace gasoline (and combustion engines) but at lower lifetime costs have the potential to completely replace combustion engines. I believe the costs will be brought down and the factory construction and scaling of the supply chain will take until about 2025. We could get to 10 million electric cars per year by about 2020 and then to 100 million by 2025.

This would likely mean that Tesla with its large lead in electric cars would likely be selling as many cars as Toyota now and possibly 2 to 3 times as many. This would be 10 to 30 million cars. Tesla would be worth $300 billion to $2 trillion depending upon the price earnings multiple. Elon Musk has about 27-28% of Tesla. He would be worth $100 billion to $600 billion depending upon exactly how big and profitable Tesla becomes.

This would also mean that Elon Musk would be able to fund all of his smaller businesses like Spacex with their reusable rockets from his own pocket.

Elon plans on creating a supersonic electric passenger plane. The battery singularity with cheap high energy density lithium sulfur or lithium air batteries would make those possible too. The follow on technology enabled by the battery singularity could make Elon Musk the first trillionaire in the late 2020s.

The 85 KWh battery pack for a Tesla S would go from $20,000 to $40,000 down to about $11,000.

Lithium ion could get even cheaper (if only from economies of scale from factories that are ten times larger in China). Lithium Sulfur batteries are getting close to commercialization. They have the potential to drive costs to about $60 per KWh. This would be about $5000 for a Tesla S battery pack.



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