GM/LG Gigafactory?

Doubtful, when all indications are that GM is feeling out demand. Would be a considerable change in direction.

 

This summer I spoke with the CEO of LG Chem at an IEEE Transportation Electrification conference about the Gigafactory. He commented their batteries are already competitive with what Tesla is offering and they didn't need a Gigafactory to accomplish this. He is retiring so it is possible that with new leadership they could also be heading in a new direction.

 

Nah. It's just GM working out a deal for their batteries. Tesla expects to sell 500,000 Model 3's and Model Y's, GM expects to sell 30K Bolts. So in car-speak, GM is really hoping for 10K to 15K and if they sell 20K then they would consider the car a hit. Fundamentally, if GM sells enough to fulfill their ZEV credit needs and have some extra left over then they'll be happy.

Tesla is out to change the world. GM is out to make more money and get management bonuses. Selling a vehicle that is superior to their ICE vehicles will not help that.

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I'm not surprised that LG has a battery chemistry that is competitive with Tesla. The question is whether they can sell them for a competitive price to a manufacturer who must then turn around and sell them to a dealership.

 

Building 500k cars would take all the lithium ion battery production in the world. So unless Tesla has it's gigafactory it will only be a dream. Plus they need to cut costs by scaling up production.

 

All public companies are out to make more money. It will be nice if Tesla can help change the world at the same time, though.

 

I saw the presenter browsing through some sheets. I am pretty sure I saw a T-shape based battery.

That would bring quite some disadvantages I also still have a hard time understanding how that could fit around 50 kWh. (Note, these slides just flasjhed by, so could be a slide comparing with the Volt).

Edit: Looked like slide that was indeed related to the Volt pack.

 

It looks like LG Chem's next generation battery cells in the Bolt EV is very competitive with what Panasonic is currently producing in Japan.

The contention that LG Chem's next generation battery cells are competitive in price and performance with the cells Tesla/Panasonic will produce at the GF is doubtful.

 

GM disagrees. Slide from a recent GM presentation:



We'll have to wait and see.

We know the raw materials aren't particularly expensive. Maybe LG has made some kind of production-process breakthrough to drop costs?

 

I was pretty excited ab8ut it untilcI saw what LG was supplying for the Bolt. Basically, they're supplying everything electronic. GM designed the motor and the rest of the car. That and the unambitious numbers says to me they cut a deal on the Bolt and the _cell_ (note cell, not battery) cost is somewhat illusory.

 

Depends on what they mean by competitive. The Panasonic cells used by Tesla since 2012 had density of 250Wh/kg, the updated ones for the 90kWh pack probably are slightly better. The LG Chem cells are slated to be 200Wh/kg. So density-wise they still lose, but at least are in the ballpark.

Cost-wise, the raw material for NMC chemistry LG Chem is using is cheaper than NCA Panasonic is using, but I'm not sure LG necessarily wins there, although it is in the ballpark. $145Wh/kg is impressive even at cell level, but with the gigafactory in full bore, Tesla is aiming at a pack level cost of $100/kWh by 2020, not just cell level.

 

The battery cost curve looks artificially flat to start with. I'm sure LG only accepted the $145 price from the start with a long term agreement that held the price there through 2019. It's probably in LG's interest though. If you consider that the volume will be much higher in 2019, giving concession on the price of a smaller volume of sales now will pay off later as long as they have a solid contract for the higher volume.

 

What is your source for the LG Bolt cell density and Tesla $100 per kWh at pack level by 2020?

The 2016 Volt PHEV cells are supposed to be around 180 Wh per kg. Bolt cells would be tuned to be more energy dense but only 10% more dense? Whose making that claim?

JB Straubel said at a utility conference this summer that he would be disappointed if cell costs didn't drop to $100 by 2020, not pack costs.

 

The only number I seen posted in direct reference to the new LG Chem cell was an estimate here of 200Wh/kg in the original breaking article interviewing the CEO Patil:
http://www.designnews.com/document.asp?doc_id=274204&dfpPParams=ind_184,industry_auto,aid_274204&dfpLayout=article
Other forum estimates put it at 210Wh/kg from a Patil presentation about a 40% improvement vs the 2011 Volt cells:

So I'm expecting somewhere in the 200Wh/kg range (maybe slightly more) but it's not going to top ~250Wh/kg from the Model S pack since 2012.

The 90kWh pack cells are going to be similar to the ~268Wh/kg NCR18650GA (3.6V*3.5Ah / 47 g).
https://www.fasttech.com/product/2399300-authentic-sanyo-ncr18650ga-3-6v-3500mah

I would have to ask for source or calculation of where you got 180Wh/kg for 2016 Volt.

Straubel never said "cell costs", he said this:
“I think most of the targets that we see from the likes of DoE or EIA are very much on the conservative side. And, you can sort of do the math on what a battery would have to cost, you know, for a vehicle that can travel 200 – 250 miles and still cost $35,000,” said Straubel, “but I think we would be disappointed if battery costs were not in the $100 dollar range [per kilowatt-hour] by the end of this decade, somewhere in this ballpark.”
http://www.hybridcars.com/tesla-projects-battery-costs-could-drop-to-100kwh-by-2020/

That talk was in the context of higher federal battery cost targets of $125/kWh by 2020, which is a pack level target, not a cell level target from slides I can find (page 4):
http://energy.gov/sites/prod/files/2014/03/f8/5_howell_b.pdf

Couple that with Elon's previous statement in 2014:
“I would be disappointed if it took us 10 years to get to a $100/kWh pack.”
10 years is 2024. That points to $100/kWh pack in 2020 time frame, not a $100/kWh cell in that time frame.
http://www.torquenews.com/2250/elon-musk-s-most-important-yet-underrated-statement-not-be-ignored

 

Those are good sources, thanks! Ironically, I tipped that HybridCars reporter to that story about JB Straubel and $100 per kWh by 2020 but my memory had gotten fuzzy now. You are right that the discussion is most likely about pack costs being at $100 per kWh rather than cell prices. I went back and watched the original video again.

As to the DesignNews article, I went back and watched the original Autoline video. LG's Patil actually says 40-50% improvement over the original 2011 Volt cells. As best as I can tell, those 2011 Volt cells were about 140-145 Wh per kg so that implies the 2016-2017 cells might be 195-215 Wh per kg.

The estimate of near 185 Wh per kg for the 2016 Volt cells came from a well-known battery analyst/consultant giving a presentation at an auto industry event earlier this year that I attended.

 

Ooo! DRAMA!

Apparently LG is very upset with GM for revealing cell pricing. Other customers are paying up to $100/kWh more for the same cells! GM is likely getting that price because LG is also supplying a large percentage of the EV electronics as well.

LG Chem "Ticked Off" With GM For Disclosing $145/kWh Battery Cell Pricing - Video



Now we know why the price curve looks the way it does. Loss-leader pricing at the front-end of the contract

 

From the insideevs article "According to McElroy, GM’s price is $100 cheaper than what anyone else is paying."

I wouldn't be too pissed off if I was LG Chem. Offer the same deal to every other OEM as you did to GM. Invest in a JV to produce cells. Buy pretty much all electronics from LG for 25k/year 200 EPA mile BEVs save for electronics in power windows,power locks, sunroof, and power seats.

The Bolt EV deserves at least an LG badge on the hatch if not the hood.

 

Tesla is out of increase revenues. Profit is a consequence of growing so much you make much more money than you're able to reinvest.
Tesla financials are very similar to other stellar silicon valley names, like Google and Amazon.
A stock that has 50% (or even 40%) revenue growth year after year after year... Gordon Gecko would approve.
Out to change the world is awesome of course. Tesla wouldn't have jumped from US$ 30 to US$ 300 if the fundamentals weren't solid.