Elon Musk has been quoted talking about a 40% increase in density compared to the roadster, but JB Straubel has been quoted saying that for most Model S, the battery cost is less than a quarter of the car, so under $25k for an 85kWh battery.
- Capacity ~ range ~ performance ~ charging mph ~ average C rate. Larger capacities make better cars with the main downside being cost and size, with weight being an additional issue.
- With the Gigafactory Tesla is targeting pricing of comfortably less than $200/kWh and at that point 10kWh costs you $2,000 or less.
- Elon Musk has said that for Gen 3, they're still targeting 200 mile real world range with Supercharging capability.
Now put all of that together. Shrinking the battery to 40kWh would:
- give a maximum drop in price of $4,000.
- Make cold-weather climate control loads more significant, significantly shortening winter range.
- Cut maximum performance.
- Lower maximum Supercharger rate. That could lead to 1 1/2 hour range charging times, especially in difficult conditions.
- Raise average C-rate.
To me, the most important element of long-range BEV is Supercharging. With the volumes Tesla is seeking, in order to avoid contention problems, they need to make Supercharging faster (JB Straubel has talked about an aim of 5-minute Supercharging) and cutting battery capacity would be a backwards step. Combined with the other negatives, lowering capacity simply won't deliver the necessary cost:benefit ratio.
I think that Supercharging determines the minimum spec and that's why Elon Musk can comfortably say that the Gen 3 will have 200 miles range, the same as current Model S 60. I think that when Gen 3 is introduced, the new cell technology will allow Tesla to increase the maximum Model S/X battery capacity and they'll drop the 60kWh Model S/X (if they even offer the 60kWh X).
When Elon Musk was asked about the Gen 3 battery costs and said that the car would be 20% smaller, so the battery would be 20% smaller, many assumed that he was talking about the reducing the capacity by 20%. I think that he was talking about needing an increase in cell energy density in order to shrink the battery, which would naturally decrease the number of cells required for any given capacity and, overall, lower the battery manufacturing cost. At Panasonic's earnings release, when the CEO was talking about being careful in investing in the Gigafactory, one of the issues he raised was that they needed to be able to meet Tesla's requirements for the Gen 3 cells. If I recall correctly Elon Musk has said the overall target is a 40% reduction in battery cost, with 15% improvement coming from the improvements to the cell, and the rest from process and scale at the Gigafactory, believing that they can eventually get a more than 30% reduction in costs from the Gigafactory alone.
