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Chart on EV competitiveness from The Economist
- Thread starter Martini
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- Energy Environment Policy
That's $141/kW today for an 85kW battery in 8 years. You're omitting the time-value of money. If you use an 7.5% nominal interest rate, compounded monthly for 8 years, it's $21,824, or $257/kW. Then remember that Tesla is getting back a perfectly usable battery, albeit one with lowered capacity, in exchange. Let's suppose that the traded-in battery is equivalent to a 50kW battery. So, you're really buying 35kW of net capacity for that $21,824, or $624/kW. Being charitable and saying it will take 8 hours of labor @$250/hr, puts the pre-installed cost at $566/kW for the battery, net. My view is that battery costs will be much lower than that in 8 years, so I don't think the battery replacement option is a particularly good deal.
7.5%. That seems very high by today's standards unless you take big risks. 1.5% seems more typical for a low risk investment.
My understanding is that a Model S battery can be changed in under ten minutes.
But its a known quantity. If you go backwards 8 years from today the return on the S&P 500 for the last 8 years was only 3.3% per year.
If you go back 10 years, its 5.8%, back 12 years its 1.25%, back 15 years its 3%.
The time value of your money over the next 8 years is unknown across a huge range.
I used 7.5% as a conservatively low estimate of Tesla Motor's WACC. But you're right - if I were to use 3.3% (most recent 8 year performance of the S&P index), the net-net cost of the battery is about $400/kW. Still seems high for batteries in the future, and you're banking on Tesla staying solvent for those years, etc.
I kind of think we're all banking on that
And who's to say that in eight or ten years the replacement battery won't have more energy density. I'm not counting on a better battery though. (Elon said that the battery was engineered for twice the warranty life, probably optimistic, but likely eight years is the short end of the life--at least for the 85 kWh battery) (Also I'm not a very good investor, so my rate of return isn't typically positive
Quoting for context, not to nitpick.
EV veterans/experts: What terminology are we using for the (A) panasonic provided parts and (B) Tesla assembly of them.
(A) battery cells
(B) battery package
?
Sounds like you agree with my name for (A). How about for (B)? I'm looking for the noun result of the assembly process.
Ah so "battery cells" is an incorrect phrasing (for the Panasonic part)?
I guess what I'm having trouble with is "battery cells" versus "battery _____". In discussions these are confused very often without the _____ being used when describing the assembled result. Maybe it's just me.
The 'battery' is the multiple of cells, just as battery can be used for other multiples (An array of similar things intended for use together - see missle battery). However, battery has become common parlance for a cell. If you want a word for the _____ then electrochemical battery or Galvanic battery would fit.
Galvanic cell - Wikipedia, the free encyclopedia
Tesla also used the term ESS (Energy Storage System), but to me that is marketing.
A Bit About Batteries | Blog | Tesla Motors
Galvanic cell - Wikipedia, the free encyclopedia
Tesla also used the term ESS (Energy Storage System), but to me that is marketing.
A Bit About Batteries | Blog | Tesla Motors
stopcrazypp
Well-Known Member
I have been calling it "battery cell" vs "battery pack" for clarification. I believe that is the industry standard terminology too (McKinsey uses the same term):
http://www.mckinseyquarterly.com/Battery_technology_charges_ahead_2997
Just using "battery" with no modifier usually means battery pack (one or more cells):
http://en.wikipedia.org/wiki/Battery_(electricity)
