Apple: Rumors of EV to Challenge Tesla or Buying Tesla

[FANGO]

). While Audi has a secret lab working on its Etron project and will reportedly have 200 miles of range. .

Audi has had a secret lab working on etrons for about 7 years now. It's so secret it doesn't exist.

Audi is the world leader in electric vehicle press releases. They deserve exactly zero mention until they tell us the price and a firm release date on their battery electric car and start taking money for it and signing contracts. Even then I would be skeptical until I drive one for myself on a public road. I don't believe a word of it.

 

[sundaymorning]

The other item of note is that these 200 mile vehicles are minis, not luxury sedan or crossover vehicles, and have minimal storage space. Their size also necessarily limits their max range potential.

This means that although their potential market increases over their current offerings, they still bang up against the limits of the size of the vehicle and do not compete with Tesla S or X.

I agree. It's absolutely less strenuous a task to build smaller EVs with smaller battery packs of less than 90 miles per charge than it is to build a dual motor luxury sedan with 3x the charge, accelerates like a super car and regarded the safest vehicle on market. This is why I'm more confident in Tesla's ability to penetrate Nissan, GM, Toyota and BMW markets as appose to others eating away Tesla's demand. Companies like Nissan and BMW may have EVs, but where's the wow factor? Apple may make cool phones and laptops, but automobiles are a different animal. Whether Apple has some tangible automobile product in the works or not, Tesla stands to benefit regardless of Apple's presence. The more Apple tries to emulate Tesla, the more free advertisement we'll receive.

 

[Citizen-T]

My rule of thumb holds for Apple as much as any other company: show me the battery factory.

If you aren't building a battery factory right now then I'm not going to waste any time contemplating whether or not you are a Tesla competitor.

 

[FluxCap]

My rule of thumb holds for Apple as much as any other company: show me the battery factory.

If you aren't building a battery factory right now then I'm not going to waste any time contemplating whether or not you are a Tesla competitor.

+infinitythousand this

 

[Gtoffo]

My rule of thumb holds for Apple as much as any other company: show me the battery factory.

If you aren't building a battery factory right now then I'm not going to waste any time contemplating whether or not you are a Tesla competitor.

Couldn't Tesla take care of that? For the right price of course.

In other news: I found this image in the comment section of an article on Tesla (has it been posted on here before?). It cements in my mind Tesla's ambition with regards to batteries (which I think most investors still can't really fully understand)

 

[Citizen-T]

Couldn't Tesla take care of that? For the right price of course.

Sure. But then I really would consider Apple a competitor. They'd be a customer.

 

[techmaven]

Couldn't Tesla take care of that? For the right price of course.

In other news: I found this image in the comment section of an article on Tesla (has it been posted on here before?). It cements in my mind Tesla's ambition with regards to batteries (which I think most investors still can't really fully understand)

View attachment 72369

What is really interesting in my mind with this graphic is the cost of the inverter. In solar systems, the cost of the inverter is a large portion of the system price. In a P85, the inverter is capable of 310 kW. The entire drive unit, motor + differential + inverter is reported to cost somewhere around $15,000. I'm not sure if labor for the swap out is included. Assuming the motor + differential is 1/2 that cost, we are looking at $7,500 for the inverter. For such a large component of the Model S, I assume that the GM that Tesla gets for the Model S roughly translates to this part also.

To compare, a Sunny Boy 11000TL-US which converts DC from solar panels to AC 240v at a peak of 11.5kW costs just over $3,000. SolarEdge SE10k-US is just under $2,000 for 10kW (480v 3phase). In comparison, on a linear per kW rate, the Tesla inverter would cost about $275 for 10kW. I'm not sure why such a large discrepancy in pricing. One would assume that everyone can buy IGBT's at volume price and put out inverters at a very low price. Maybe the floor pricing is high and the incremental price for higher power isn't very much? If that were the case, there shouldn't be the spread in pricing between lower and higher priced inverters:

http://www.wholesalesolar.com/inverters.html

Looking at the batteries alone, Tesla currently charges $280/kWh for the 60 kWh to 85 kWh battery upgrade in a Model S. A 30 kWh battery pack would cost somewhere around $9,000 (have to add some for the battery enclosure). Add an 240v 20kW inverter for $1,000 and a DoD of 75%, we're looking at $10,000 for 30kWh capacity, 22.5kWh usable solar storage unit, or $0.44/watt. I would expect that at 75% DoD, this setup would have > 3,000 cycles of life to 80% usable capacity.

For comparison (not picking on them, they just have handy kits with prices attached), off grid solar pricing looks like this right now:

http://www.wholesalesolar.com/solarpowersystems/workshop-8-off-grid-solar-power-system.html

The Rolls battery bank there is 61.6 kWh for $8,674. Remember, for these kind of lead acid batteries, depth of discharge is recommended at 50% to get even close to 2,000 cycles. To get to 3,000 cycles, we're looking at far less, let's guess 40% DoD, which brings us to the same ball park as the Tesla solution above. Presumably, the $280/kWh figure that Tesla is charging has a significant GM... approaching 30%. Which means Tesla's 2012 pricing and battery solution is already price competitive on a total lifecycle basis as lead acid batteries designed for off-grid solar. As we go forward into the era of Gigafactory battery pricing, the difference will be significant.

However, the big price difference is in the power electronics. That pricing is roughly $15k in the off-grid solution above. Plus, the capability of discharging at 2C (120kW on a 60kWh battery pack) at a relatively decent price point, say $3,000 means that the battery pack and inverter system can be sized to carry the load of most houses - including the big loads like emergency resistive heating and hot water heaters.

 

[jhm]

My rule of thumb holds for Apple as much as any other company: show me the battery factory.

If you aren't building a battery factory right now then I'm not going to waste any time contemplating whether or not you are a Tesla competitor.

Spot on. I think the time has come for EV makers to measure their sales in GWh. For example, in 2014 Nissan sold 61,500 Leaf which comes in at 1.48 GWh. Not bad, but Tesa sold 31,600 @ 80 kWh, which works out to 2.53 GWh. Why does this matter? Nissan clearly has a huge capacity lead over Tesla when it comes to making everything but the batteries. The ability to scale up battery production is a limiting factor for all EV makers. The growth rate in Leaf sales is slowing. It was only 29% last year over 2013. It is unlikely sales can reach 80,000 this year without offering a car that double the Leaf's range. This puts an extra burden on growing battery capacity. They need to increase by 30% for unit sales and by 50% to offer an average battery size of 36 kWh (half at 24 kWh and half at 48 kWh). Thus, they need to produce 2.88 GWh this year, a whopping 95% increase just to sustain modest 30% unit sale growth. It seems unlikely that Nissan will offer a higher capacity battery this year. Lot of leased Leafs are flooding the used car market at prices below $15,000. (And used Leafs need replacement batteries too.) So customers will put off new purchases, and Nissan may find itself struggling to find enough demand for 70,000 cars. This puts the Leaf into a really awkward place: just when they need to double battery capacity, demand for the model stalls out. They become both demand and supply constrained at the same time.

This is the risk any of these small battery EV makers face. They lunge ahead on unit sales because they have the automotive capacity to do so, but you simply cannot sustain demand growth for a severely range limited vehicles. The Chevy Bolt very well could be the death of the Leaf. But of course, the Bolt will have to grow it battery capacity faster than its unit growth. They may enter the maket with a 200 mile range vehicle, but to sustain longterm demand growth they will have to offer a 300 mile range vehicle too.

Conversely, I am much more comfortable with Tesla's strategy of leading with high range vehicles and securing longterm growth in battery capacity. They can easily make more smaller capacity batteries if this is what consumers demand, but it is much harder to scale up unit sales while increasing the average pack capacity. So this is why all EV investors should be looking at sales in GWh units. For Tesla to stretch into 60,000 auto sales this year plus some home storage units, it will need about 5 GWh capacity. Growing just at 50% annually, it will need a second Gigafactory to come online by 2020. But to grow at 75% per year, Tesla will need this second gigafactory to come online in 2018. If we do not see within the next 12 months Tesla develop plans for a second Gigafactory, then we will know that Tesla will not be attempting to grow much faster than 50% per year. In other words, I completely expect such announcement this year, probably while we are basking in the glow of the Model X.

At any rate, growing GWh production is an essential indicator of strategic intent.

 

[kenliles]

My rule of thumb holds for Apple as much as any other company: show me the battery factory.

If you aren't building a battery factory right now then I'm not going to waste any time contemplating whether or not you are a Tesla competitor.

anything Apple does in volume is many years away (they are not first movers); given the capital resources and logistics expertise of the company, I wouldn't expect to 'see' battery factories until they commit to product level. In the meantime any mini battery factory production is well within the FoxConn capability. All in, I think the measure of whether Apple is seriously engaged in this product development is decidedly NOT indicated by the existence of a battery factory. That's the very last production scale event I would expect to see
- regardless I think Apple might be looking at it very seriously, but with many fall back positions of partnering for the heavy production lift as they do now; or simply 'productize' the experience and leave the rest to a Tesla or similar. I'd be guessing all options are being considered and available, regardless of any current plans for a battery factory

 

[MartinAustin]

I think the time has come for EV makers to measure their sales in GWh. For example, in 2014 Nissan sold 61,500 Leaf which comes in at 1.48 GWh. Not bad, but Tesa sold 31,600 @ 80 kWh, which works out to 2.53 GWh.

Totally agree with this excellent point, jhm !!!

Just to try to work out how much Chevy is going to sell via the Bolt, they're going to start at 30,000 cars per year... let's assume it uses 250Wh/mile on average, and so it would need a battery of 50KWh. Chevy would be shipping 1.5GWh of batteries. (very unscientific math)

 

[techmaven]

Spot on. I think the time has come for EV makers to measure their sales in GWh. For example, in 2014 Nissan sold 61,500 Leaf which comes in at 1.48 GWh. Not bad, but Tesa sold 31,600 @ 80 kWh, which works out to 2.53 GWh. Why does this matter? Nissan clearly has a huge capacity lead over Tesla when it comes to making everything but the batteries. The ability to scale up battery production is a limiting factor for all EV makers. The growth rate in Leaf sales is slowing. It was only 29% last year over 2013. It is unlikely sales can reach 80,000 this year without offering a car that double the Leaf's range. This puts an extra burden on growing battery capacity. They need to increase by 30% for unit sales and by 50% to offer an average battery size of 36 kWh (half at 24 kWh and half at 48 kWh). Thus, they need to produce 2.88 GWh this year, a whopping 95% increase just to sustain modest 30% unit sale growth. It seems unlikely that Nissan will offer a higher capacity battery this year. Lot of leased Leafs are flooding the used car market at prices below $15,000. (And used Leafs need replacement batteries too.) So customers will put off new purchases, and Nissan may find itself struggling to find enough demand for 70,000 cars. This puts the Leaf into a really awkward place: just when they need to double battery capacity, demand for the model stalls out. They become both demand and supply constrained at the same time.

Well, both the LG Chem plant in Michigan that supplies GM and Ford as well as the AESC/Nissan plant in TN are both chronically under utilized. They simply haven't been able to sell as many vehicles as they had hoped to when these plants were created. The inability to keep these plants at higher levels of utilization probably also affects cell pricing.

In terms of GWh, remember that the capacity of the plant is usually measured in cells and the battery chemistry can dramatically alter the amount of energy per cell. So the expected dramatic increase in specific energy available with 2nd generation NMC chemistry will have a big impact on the GWh nameplate ratings of these factories. Nameplate capacity of the Smyrna, TN AESC plant is 200,000 packs, which is 4.8 GWh with a 24 kWh battery pack that has 140 Wh/kg. If you move that to 250 Wh/kg, that's a straight up increase to 8.6 GWh of production capacity. They have never actually run the plant at nameplate capacity - they haven't sold enough Leafs yet. To hit nameplate, they probably can't source enough precursor parts to do it yet, but that can obviously be solved too.

LG Chem, on the other hand, says that they have enough capacity to supply 350,000 vehicles (end of 2013). Of course, that's a lot of small packs for hybrids too. At their Holland, MI facility, reportedly they can make 60,000 Volt battery packs per year. That's about 1 GWh. But if you go up to somewhere around 250 Wh/kg, we're talking 1.8 GWh. Of course, they also have a lot of battery capacity in South Korea and China. So far, they've probably not hit 60% utilization at the Michigan plant.

Of course, between Tesla's Gigafactory and Panasonic's Osaka battery plants, Tesla is looking to move 50 GWh by 2020. What is very interesting is what happens in through 2018, as the existing LG Chem and Nissan plants hopefully hit nameplate capacity with 2nd generation NMC and battery plants in Asia kick in, will they be able to supply demand. Further, as the initial stages of the Gigafactory kick in, what capacity is actually available in 2017 and 2018? I'm guessing somewhere around 12-15 GWh in by the end of 2017.

 

[Curt Renz]

Article by serial entrepreneur Jason Calacanis on Saturday: Apple will buy Tesla for $75b in 18 months (prediction) | Calacanis.com

Opening line: "Apple will buy Tesla for $75b in 18 months — it’s a lock (in my mind)."

 

[jhm]

Well, both the LG Chem plant in Michigan that supplies GM and Ford as well as the AESC/Nissan plant in TN are both chronically under utilized. They simply haven't been able to sell as many vehicles as they had hoped to when these plants were created. The inability to keep these plants at higher levels of utilization probably also affects cell pricing.

In terms of GWh, remember that the capacity of the plant is usually measured in cells and the battery chemistry can dramatically alter the amount of energy per cell. So the expected dramatic increase in specific energy available with 2nd generation NMC chemistry will have a big impact on the GWh nameplate ratings of these factories. Nameplate capacity of the Smyrna, TN AESC plant is 200,000 packs, which is 4.8 GWh with a 24 kWh battery pack that has 140 Wh/kg. If you move that to 250 Wh/kg, that's a straight up increase to 8.6 GWh of production capacity. They have never actually run the plant at nameplate capacity - they haven't sold enough Leafs yet. To hit nameplate, they probably can't source enough precursor parts to do it yet, but that can obviously be solved too.

LG Chem, on the other hand, says that they have enough capacity to supply 350,000 vehicles (end of 2013). Of course, that's a lot of small packs for hybrids too. At their Holland, MI facility, reportedly they can make 60,000 Volt battery packs per year. That's about 1 GWh. But if you go up to somewhere around 250 Wh/kg, we're talking 1.8 GWh. Of course, they also have a lot of battery capacity in South Korea and China. So far, they've probably not hit 60% utilization at the Michigan plant.

Of course, between Tesla's Gigafactory and Panasonic's Osaka battery plants, Tesla is looking to move 50 GWh by 2020. What is very interesting is what happens in through 2018, as the existing LG Chem and Nissan plants hopefully hit nameplate capacity with 2nd generation NMC and battery plants in Asia kick in, will they be able to supply demand. Further, as the initial stages of the Gigafactory kick in, what capacity is actually available in 2017 and 2018? I'm guessing somewhere around 12-15 GWh in by the end of 2017.

All good information, but what puzzles me is why Nissan is not yet using 250Wh/kg cells. It seems would solve their demand problem, range problem, and underutilizarion problem. If they a short on precursor materials, then they are in fact supply constrained. Whatever the case is, you can still use GWh to to measure how well they are performing. And of course the best way for them to improve their performance is to upgrade their technology to deliver higher density packs.

 

[AlMc]

Article by serial entrepreneur Jason Calicanus on Saturday: Apple will buy Tesla for $75b in 18 months (prediction) | Calacanis.com

Opening line: "Apple will buy Tesla for $75b in 18 months — it’s a lock (in my mind)."

A TMC friend had forwarded this to me. I am totally OK with the idea. I think it would be a 'win-win' for both companies. TM gets unlimited cash to expedite the stated mission of bringing the world to renewable energy sources for transportation and Apple leapfrogs Google for autonomous driving and putting 'car play' into every car. As the author states, what else do all those vehicle passengers have to do while sitting in a driverless car than fiddle/work with an interactive/internet connected device supplied by........you know who.


edit: I have no problem not participating in TSLA being $1,000 in 5 years as some suggest.....I'll take $600/share in 2016, no problem

 

[chickensevil]

Article by serial entrepreneur Jason Calacanis on Saturday: Apple will buy Tesla for $75b in 18 months (prediction) | Calacanis.com

Opening line: "Apple will buy Tesla for $75b in 18 months — it’s a lock (in my mind)."

Every time I read these articles I just shake my head. Apple has no stake in EVs and there is nothing for them in this space. And then to fork out 75B for a company is also a rediculous price to buy someone out. Yes I know they have a ton of cash but they will need to continue to sink the remaining 100B in cash just to fully bring Tesla up to speed. I just don't see thus happening when EVs are not really their space. Cars are more than just fancy computers.

 

[ecarfan]

Article by serial entrepreneur Jason Calacanis on Saturday: Apple will buy Tesla for $75b in 18 months (prediction) | Calacanis.com
Opening line: "Apple will buy Tesla for $75b in 18 months — it’s a lock (in my mind)."

Click bait opening line. Complete nonsense. EVs are completely outside of Apple's core competency. Tim Cook too smart to do such a thing.

 

[Citizen-T]

To be fair, Jason is not in need of click bait. He is a very early and consistent supporter of Tesla. Wasn't he one of the earliest Model S owners too? Whether he is right or not is one thing, whether or not he is sincere in writing this piece is beyond question.

For the record, I think he's wrong. It doesn't make sense for either company.

 

[AlMc]

Every time I read these articles I just shake my head. Apple has no stake in EVs and there is nothing for them in this space. And then to fork out 75B for a company is also a rediculous price to buy someone out. Yes I know they have a ton of cash but they will need to continue to sink the remaining 100B in cash just to fully bring Tesla up to speed. I just don't see thus happening when EVs are not really their space. Cars are more than just fancy computers.

Click bait opening line. Complete nonsense. EVs are completely outside of Apple's core competency. Tim Cook too smart to do such a thing.

Even if you don't think it is a good idea for Apple would you consider it a better way to expedite the adoption of EVs (BEVs) and completing TM's stated objectives?

 

[Citizen-T]

Even if you don't think it is a good idea for Apple would you consider it a better way to expedite the adoption of EVs (BEVs) and completing TM's stated objectives?

Only if Elon becomes Apple CEO as part of the deal. Otherwise I'd have to conclude it would result in a distraction and the slowing down of Tesla's mission.

 

[AlMc]

Only if Elon becomes Apple CEO as part of the deal. Otherwise I'd have to conclude it would result in a distraction and the slowing down of Tesla's mission.

Agreed, and that was part of Jason's premise.:wink: