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autobloggreen: Can the Model S be profitable at $57,400?

Discussion in 'News' started by TEG, Apr 29, 2009.

  1. Ben W

    Ben W P85 #61, Roadster #108

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    I posted a comment on the linked article:

    There are several errors in the author's analysis. First of all, let's go by Tesla's math that replacement packs for the Roadster cost $36,000 today (for the customer). At a 20% margin, that's a $30k cost to Tesla today. For the base model S's smaller pack, Tesla's cost today is about $30k * 42/53 = $23,773. And if we follow Tesla's assumption that the cost will fall by a factor of three in seven years, that works out to a cost reduction of 14.6% per year. Since the Model S ship date is realistically about three years off (best case 2 1/2 years), that leads to an actual cost to Tesla of roughly <b>$14,850</b> for the battery pack in three years. Factor in 3% inflation, and that's still only about $16,000 in 2012 dollars, a far cry from the author's $28,528 figure.

    Finally, considering that the battery is by far the single most expensive component of the car, and that there's no engine (just the proven electric motor and drivetrain), and that the 17" touchscreen will almost certainly be AN OPTIONAL FEATURE, the projected $57,400 pricepoint doesn't seem so farfetched.
     
  2. graham

    graham Active Member

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    Both autobloggreen and BI got their numbers wrong on this one.

    The $30,000 ($36,000 according to BI) for the Roadster battery is the consumer cost for a replacement - not the actual cost of the part. Most estimate Tesla's wholesale cost of materials to be around $20,000-$25,000.

    Additionally Tesla seems to be counting on the cost of batteries to continue to
    drop over the next 2 years at 8% per year. That would put the cost of the parts of the Roadster 53kwh battery at between $17k-$21k by the time the Model S comes out (maybe even lower depending on how long the Model S gets delayed)

    Using the BI math with that number instead:
    $17000 / 53kwh = $320/kw
    $21000/53 = $396/kw

    So by the time the Model S is released, battery costs are estimated to cost Tesla between $320-$396/kw

    $320 * 42 == $13,440
    $396 * 42 == $16,632

    With a $57,400 base price, that would leave between $40,700- $43,900 left to build the car.

    If they delay another year the delta between battery price and car revenue only goes up.
     
  3. graham

    graham Active Member

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    I have seen several of these articles now, spreading terror that we will run out of Lithium. And that Bolivia will be the new middle east because of it.

    This may all turn out to be true. But I wish they would also balance their fear mongering with the notion that while todays top batteries are Lithium based, less than a decade ago the top batteries were NiMH, and before that: Pb.

    Based on past history, we will have a the next new technology to fear monger about by the time we start using up our supply of Lithium.
     
  4. JRP3

    JRP3 Hyperactive Member

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  5. vfx

    vfx Well-Known Member

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    And that it's not something we toss in a furnace.
     
  6. TEG

    TEG TMC Moderator

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  7. TEG

    TEG TMC Moderator

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  8. Palpatine

    Palpatine Banned

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    The cost for 40 kwh of lithium batteries is not $30,000.

    It is closer to $12,000 for the raw cells from Asia. Now I am sure Tesla adds some work to the package for liquid cooling and a good battery management system to control the max voltage and min voltage. But that still doesn't get the cost per unit up to $30,000.

    My guess is between $15,000 to $18,000 for the batteries and having them all put together with the liquid cooling system.

    I just bought 150,000 Amp Hours of a different chemistry (LIFEPO4) from Thundersky. While the price might be different for Lithium Cobalt Oxide, it is not dramatically different. They are all competitive with each other, but some provide different advantages depending on the goal of the end user.

    I could get the same kwh in the Model S (40 kwh) for $12,000 in a bulk purchase. I could add a good BMS for $2,000. The top of the line 30 amp charger could be installed onboard for $2,000.

    There are a few other components. But nothing crazy. The electric motor is a big question mark. AC Propulsion will sell them for $11,000 if you buy a lot of them. $30,000+ if you only buy one of them.
     
  9. malcolm

    malcolm Active Member

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    #11 malcolm, Apr 30, 2009
    Last edited: Apr 30, 2009
  10. Cobos

    Cobos S60 owner since 2013

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    This has already been commented in another thread linking to the Autobloggreen post about this same article. The article is full of misunderstanding and errors. The battery cost for one is wrong. The screen cost seems dubious when I could with a 2 min search find a touchscreen for about $800 for endusers. They first substract 28% of the revenue for retail and distribution, and then at the end they comment on the cost of creating the Tesla stores. That alone surely should at least only be counted once.
    They also fail to grasb the fact that Tesla uses in many ways a non-optimal battery pack for the express reason they get very good cost advances for "free" since they are commodity cells.

    Cobos
     
  11. Tdave

    Tdave Member

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    If the EV car market takes off as much as we'd like it to, while still being realistic, that demand curve will be far steeper.
     
  12. JRP3

    JRP3 Hyperactive Member

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    ACP won't sell you only one any more, they don't want to deal with the general public. There are some other options for AC motors, some guys over at DIY are trying some AC, (BLDC), motors from China, and I'm using the low voltage, (108volt), AC31 from HPG, who are looking for higher voltage controllers for their motors.
     
  13. vfx

    vfx Well-Known Member

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    Tesla responds.

    Rachel Konrad,
     
  14. TEG

    TEG TMC Moderator

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    Something else we assume is that the base Model S will not have all the features of the prototype shown. For instance, they might leave off the fancy 21" alloy wheels, fancy moonroof, fancy self opening door handles, etc, so they could reduce costs at will by making more things optional. So how can anyone really estimate costs now not knowing which features will be included on the base model?

    We basically know the Roadster started out costing more to build than originally projected, so lets hope this time around they have better estimates!
     
  15. TEG

    TEG TMC Moderator

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    Over there, BBhighway wrote:
    Just a reminder - that "bubble" is likely burst. The easy credit, anyone can get a big car loan, anyone can get a risky second mortgage are gone (for now). A $50K+ vehicle really is out of reach for much of the mainstream.

    Still, this is not meant to be Tesla's "Model T". Their sales projections sound believable to me given the number of well off people who could want a vehicle like this.
     
  16. BBHighway

    BBHighway Member

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    I wasn't saying that the average person can afford a $50,000 vehicle, just that most of the people who can afford them are middle class, not the rich. Upper middle sure, but mostly not what you would call rich.

    Of course its all relative. Compared to Nigeria, where 70% of the population lives on less than $1 a day, just about everyone in America is obscenely rich.
     
  17. TEG

    TEG TMC Moderator

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    #19 TEG, Apr 30, 2009
    Last edited: Apr 30, 2009
    What does it mean to be "middle class" in America today?: Consumer Reports Money & Shopping Blog
    Affordability New Cars
    ($50K car for $250K income)?

    Auto Affordability Index Worsens – Used Car Market Will Feel Effect

    Some of the "upper middle class" who bought a $50K+ car in recent years seem to be thinking twice now given the economic uncertainties.
     
  18. TEG

    TEG TMC Moderator

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    Marketplace: What is the middle class?
     

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