I wonder how much equivalent BEV batteries are costing GM for the Bolt and Tesla for the M3 and will the cost go down for GM little more than a year from now when the M3 should be in production? What company will have the leverage to be more competitive in manufacturing batteries or sourcing them?
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GM is reported to pay LG $145/kWh on their battery. I'm not sure if this is cell or pack price? This was a very competitive price and I will not think it will get down the first few years.
The latest known pack-price for the Tesla battery was "under $190/kWh". They have said that they expect at least 30% reduction in price for the cells that they get from the GF-I. Probably closer to 50%. Later there is some indications (the do expect more cells/batteries to be produced at the same factory space - more or less the same investment) that they may have found ways to lower it even more...
It is to me unknown how many batteries (and other stuff) LG is able to produce to meet GM's needs.
The latest known pack-price for the Tesla battery was "under $190/kWh". They have said that they expect at least 30% reduction in price for the cells that they get from the GF-I. Probably closer to 50%. Later there is some indications (the do expect more cells/batteries to be produced at the same factory space - more or less the same investment) that they may have found ways to lower it even more...
It is to me unknown how many batteries (and other stuff) LG is able to produce to meet GM's needs.
Red Sage
The Cybernetic Samurai
There was at one time a reported rumor that Tesla Motors' internal cost was something like $180 per kWh. I believe I first came across that number in the latter half of 2014. I remember being amused, because some guy had recently published his findings that there was 'no way' electric vehicles could be viable for mass market sales until their cost was at $178 per kWh or less. I have no idea if he meant per cell or by the pack.
GM has stated that they can expand operations to offer 50,000 to 60,000 of the BOLT if necessary to cover unexpected/increased demand.
It was cell cost. It was on a new delivery contract with Panasonic - to get them to extend their deliveries as Tesla saw the interest in their Model S.. At that time the pack price was guessed at about $220/kWh (based loosely(?) on the $180/kWh cell price). Other less informed sources guessed their pack price to be way way way above this numbers at that time.
https://neo.ubs.com/shared/d1vn32UwCm8eh
Red Sage
The Cybernetic Samurai
Cool. I prefer to converse in terms of battery cell cost anyway.
$180 × 0.7 = $126
So, assuming only the 30% discount than Elon Musk expects from using Gigafactory battery cells... That's only $126 per kWh from the outset. That's $19 less per kWh than GM is getting from LG for the BOLT.
Assuming a 7% improvement in pricing each year...
2017 ___ $126 × 0.93 = $117.18
2018 ___ $117.18 × 0.93 = $108.98
2019 ___ $108.98 × 0.93 = $101.35
2020 ___ $101.35 × 0.93 = $94.25
2021 ___ $94.25 × 0.93 = $87.66
Hence, why Elon Musk said in 2014 that he would be disappointed if it took a decade for Tesla Motors to get below $100 per kWh.
The $180/kWh price was from 2013 or 2014. We are now at 2016, and the battery cells from GF-I will probably not start to appear in production cars until 2017. So it is reasonable to think that the (at least) 30% price reduction is from a lower price-point then that. When the LG battery price was published last year Elon hinted (from en event in Japan if I remember correct) that Tesla already was below this $145/kWh cell price. But that statement could also be interpreted as "the price will be below this when Model 3 is produced".
MiamiNole
Member
I remember reading about this topic months back and someone saying that GM's deal with LG has a price that is locked in for a significant amount of years. So even as the cost to LG goes down, GM is still locked into the same price throughout the deal.
And the only reason GM got this low price is because GM is buying tons of other stuff for the Bolt from LG. Pretty much anything tech is from LG as I recall. Since they got the package deal from LG, they priced the cells low. If they were just buying cells, I'm sure it would have been a lot higher.
MiamiNole
Member
I know someone had a direct source citing the length of the GM deal with LG Chem, but couldn't find it during a quick google search. Best I could find was a year old article from Inside EVs. According to this graph from the article, the $145 price is locked in through 2019. I also found other articles mentioning the GM-LG Chem partnership also including LG being the sole supplier for a number of electronics in the Bolt, as the poster above mentioned.
I've heard people jokingly refer to it as the LG Bolt rather than the Chevy Bolt. Its probably not far from the truth.
I find it hilarious that GM probably doesn't care about battery cost nor needs the Bolt to be profitable. Meanwhile, Tesla needs to lower battery cost and be profitable to remain afloat, pressure makes people and businesses do the impossible.
I'm really looking forward to seeing how things play out.
I'm really looking forward to seeing how things play out.
When you're only going to make 20k-30k per year and you are selling tons of ICE SUVs and trucks and making a killing off them, losing money on the Bolt is a rounding error in your financials.
Red Sage
The Cybernetic Samurai
Yup! A rounding error attributed to marketing expenses. Plus, with truckload of ZEV Credits from CARB States it ends up being a wash -- aside from the improved CAFE rating allowing you to build and sell even MORE SUVs and pickups.
SmartElectric
Active Member
I don't joke about it. One of my co-workers resists buying GM, but when I mentioned all the important bits were LG, it made him more interested. He'll get an EV, but not sure which one.
Here's the original article that discusses Tesla's current battery pricing
UBS Sees Telsa's (TSLA) Model 3 As Unprofitable
Basically, Jon Bereisa who was the chief engineer of the Chevy Volt estimated that the Chevy Bolt's battery pricing to be $210/kWh at the pack level, based on $145/kWh at the cell level. Obviously, he knows GM's and LG's costs the best. He also estimated that Tesla's Model 3 pack costs would be $260/kWh. Of course, he doesn't know Tesla or Panasonic costs at all. So Jeff Evanson of Tesla Investor Relations calls in and states that the Model S's all-in pack cost is already under $190/kWh.
There is some contention on SG&A, R&D, and other items to sort out costs. What the UBS analyst and Mr. Bereisa don't seem to understand is that the Gigafactory won't have typical supplier markup.
In any case, for gross margin purposes, Tesla's pack cost is under $190/kWh now. Even at a modest 20% reduction with the Gigafactory, the cost would be $152/kWh.
Therefore, a 60 kWh Bolt pack would cost GM about $12,500.
A 55 kWh Model 3 pack would cost Tesla about $8,500.
A difference of about $4,000 on vehicles that retail for the mid-$30k's is a lot. Margin at these price points is very slim. However, GM's pricing for the rest of the car is likely far better than Tesla's pricing. Basically, the pack cost advantage is one of the key parts where Tesla makes up ground for their lack of manufacturing expertise at a grand scale.
UBS Sees Telsa's (TSLA) Model 3 As Unprofitable
Basically, Jon Bereisa who was the chief engineer of the Chevy Volt estimated that the Chevy Bolt's battery pricing to be $210/kWh at the pack level, based on $145/kWh at the cell level. Obviously, he knows GM's and LG's costs the best. He also estimated that Tesla's Model 3 pack costs would be $260/kWh. Of course, he doesn't know Tesla or Panasonic costs at all. So Jeff Evanson of Tesla Investor Relations calls in and states that the Model S's all-in pack cost is already under $190/kWh.
There is some contention on SG&A, R&D, and other items to sort out costs. What the UBS analyst and Mr. Bereisa don't seem to understand is that the Gigafactory won't have typical supplier markup.
In any case, for gross margin purposes, Tesla's pack cost is under $190/kWh now. Even at a modest 20% reduction with the Gigafactory, the cost would be $152/kWh.
Therefore, a 60 kWh Bolt pack would cost GM about $12,500.
A 55 kWh Model 3 pack would cost Tesla about $8,500.
A difference of about $4,000 on vehicles that retail for the mid-$30k's is a lot. Margin at these price points is very slim. However, GM's pricing for the rest of the car is likely far better than Tesla's pricing. Basically, the pack cost advantage is one of the key parts where Tesla makes up ground for their lack of manufacturing expertise at a grand scale.
ElecFan
Member
Battery pack costs per kWh are still dropping. Down to €209 in 2017 from €273 in 2016 and €350 in 2015. That's ~23.5% lower in one year and 40% lower in two years. Tesla claims to have been at €190 beginning 2016, so they could now be at €120-130. See also my post at Tesla Semi: Pack Cost Per kWh.
Nice to see the battery costs still dropping. The M3 might even get cheaper in a couple of years or (more probable) be equiped with a larger battery just like the MS and MX. It would make my choice between LR and SR easier.
Nice to see the battery costs still dropping. The M3 might even get cheaper in a couple of years or (more probable) be equiped with a larger battery just like the MS and MX. It would make my choice between LR and SR easier.
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While cost per kWh installed sounds like the better measure, it heavily depends on the battery pack's size. Tesla for example said they were below $190 per kWh on their big packs, but that means they probably weren't with their small ones.
The same will be true for the LR and SR. So the best measure would be comparing cell cost. Or pack cost for similar sized packs.
So on cell cost:
A guy from Audi said they can buy cells at €100/kWh right now ($120), GM has their infamous sheet, but there isn't really much more we know about Tesla, for example. Now that's not really enough for a comparison.
On price installed:
We have some quote from Tesla about the biggest S and X pack costing less than $190 kWh installed. Chevy's pack is assumed to cost 11,500 by UBS, which would be about $180 per kWh installed. You can also buy a pack by Genuine GM Parts - GMOutletParts.com for $11,646, which makes me think the battery's price could actually be even lower. But there isn't really a lot of info from other manufacturers.
IMO we just have too little info to really draw comparisons. Sure you can think up your own numbers, based on statements and guesses about the cost progress, but unless we get some real intel from Tesla, drawing comparisons doesn't really make much sense.
The same will be true for the LR and SR. So the best measure would be comparing cell cost. Or pack cost for similar sized packs.
So on cell cost:
A guy from Audi said they can buy cells at €100/kWh right now ($120), GM has their infamous sheet, but there isn't really much more we know about Tesla, for example. Now that's not really enough for a comparison.
On price installed:
We have some quote from Tesla about the biggest S and X pack costing less than $190 kWh installed. Chevy's pack is assumed to cost 11,500 by UBS, which would be about $180 per kWh installed. You can also buy a pack by Genuine GM Parts - GMOutletParts.com for $11,646, which makes me think the battery's price could actually be even lower. But there isn't really a lot of info from other manufacturers.
IMO we just have too little info to really draw comparisons. Sure you can think up your own numbers, based on statements and guesses about the cost progress, but unless we get some real intel from Tesla, drawing comparisons doesn't really make much sense.
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