Tesla Cybertruck: Battery Price Dive
Credit to Author: Frugal Moogal| Date: Mon, 25 Nov 2019 03:30:37 +0000
Published on November 24th, 2019 | by Frugal Moogal
November 24th, 2019 by Frugal Moogal
Following the Cybertruck reveal, I went to bed not being sure exactly what I had just seen, and woke up still thinking about it. My oldest son took one look and said it was the “sickest” car he had ever seen (this is a good thing), and my wife thought it was far more interesting than I expected.
Interestingly, I watched the stock price go down by about 6% as I wrote this. Not enough for me to hop on buying more stock, but enough for me to think about it a little more.
I was interested in the batteries, and so I have spent the morning running some calculations. Here’s what I came up with…
(Before I go on, this is so incredible to me that I feel like I have to say this is my speculation, so please don’t use it as stock advice. Also, you can check my math, as I posted it all.)
Before explaining the batteries fully, I need to note the size. This thing is huge. The Tesla Cybertruck is 231.7 inches long, 79.9 inches wide, and 75.0 inches tall.
This means the Tesla Cybertruck is significantly bigger than the Model X. It is 33.7 inches longer, 0.9 inches wider, and 9 inches taller.
(This also means the Tesla Cybertruck is about the same size as the Ford F-150, Dodge Ram, Toyota Tundra, and other popular trucks. The majority of them seem to fall between 229 and 251 inches long, 80–82 inches wide, and 75–77 inches tall.)
Let’s do some math to come up with reasonable battery size estimates for this thing.
The standard range Model X that was sold earlier this year containing a 75 kWh battery gave that version of the vehicle a range of 250 miles. Tesla is starting the Cybertruck off with 250+, so that’s equal.
It’s reasonable to assume the Cybertruck will be minimally 17% heavier than the Model X, which is the difference in length between the two vehicles using the Model X numbers as a base, since I have the battery size there. Stainless steel will probably make it significantly heavier than the aluminum in a Model X, but let’s pretend it won’t.
A 75 kWh battery multiplied by 105.4% range increase multiplied by 117% size/weight increase gives us a battery that would be minimally 87.75 kWh for the base model Cybertruck.
This is a battery nearly 75% larger than the Model 3’s Standard Range Plus, which — again — costs only $510 less than the base Cybertruck.
It is extremely difficult to know what companies are paying for EV batteries, so please do understand this has significant level of speculation to it. Last December, CleanTechnica’s own Steve Hanley wrote an article about how Lei Zhang, founder and CEO of Envision Energy, predicted the cost of manufacturing EV battery cells would fall below $100 per kWh by next year, and below $50 per kWh by 2025. In that article, it was noted that the current standard belief of the price of Tesla battery cells, as of December of 2018, was $145 per kWh, with the packs costing $190 per kWh.
It’s still speculative what the costs today are. An unnamed VW source told the New York Times they were getting their batteries for their ID line below $100 per kWh, although they didn’t note if that was at the cell or pack level. Meanwhile, as of March 2019, BloombergNEF explained why we shouldn’t expect a price below $100 per kWh until around 2024.
But none of that matters until we see real pack costs, so let’s do a bit more math.
If we assume the $190 per kWh battery pack costs above were correct at the time battery production started for the Model 3, the Standard Range Plus’s 50 kWh battery costs about $9,500.
If we assume that Tesla spends the same on everything else to build the Tesla Cybertruck as it does on the Model 3, Tesla needs to be building 87.75 kWh battery packs for $9,500 by 2021. This would put the pack level costs at $108.26 per kWh by 2021.
If the $190 cost for the pack level is correct, this means Tesla will achieve a 45.9% drop in battery pack costs in three years.
Perhaps even better, if the original price of the battery costs less than the $190 per kWh estimate, then we would be looking at costs even lower.
It’s also worth pointing out, if the Model 3 battery pack was to achieve the same efficiencies, it would save an additional $4,087 per Standard Range vehicle, single-handedly increasing the margin on the vehicle by more than 10% if the price is not cut. While I think the Model 3 battery pack has achieved some level of efficiency, I don’t think it was nearly this size reduction.
And, I think this may be high. I think it’s realistic that battery pack prices all-in for Tesla may be anticipated to be below $100 per kWh.
I’m stunned. This is incredible if I’m even close to right.
To be clear, I don’t think that whatever Tesla has pulled off here is in the Model 3 right now, and I doubt it will be in the Model Y, although I guess it’s possible that the Chinese made versions of both of these cars could have it.
It’s also possible that this wasn’t done all by cost reduction. Maybe they found a way to make the batteries significantly lighter, meaning a reduced weight that throws off my numbers above for each kWh but results in roughly the same amount of savings for Tesla per vehicle.
If my numbers are even close, this changes everything.
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Frugal Moogal A businessman first, the Frugal Moogal looks at EVs from the perspective of a business. Having worked in multiple industries and in roles that managed significant money, he believes that the way to convince people that the EV revolution is here is by looking at the vehicles like a business would.