Predictions Competition Poll #4: Price difference per kWh between largest and smallest battery

[Troy]

Hi, everybody. This poll is part of the Tesla Predictions Competition. Check out the competition rules there if you want.

1. Once you submit your vote, you can't change it.

2. Scoring will be as follows:

• 10 points for the correct answer,
• 5 points if your choice is one option above or below the correct answer

3. This poll is about the price difference per kWh between the largest and smallest Model 3 battery.

Example:
Model 3 45 starts at $35,000
Model 3 70 starts at $40,000.
The difference is 25 kWh for $5,000 which is $5,000/25 kWh= 200 USD per kWh.

4. If Tesla releases price information for only the smallest or only the largest battery version, the poll will close as usual but we will wait until both are available to score this poll.

5. Tesla might bundle other options together with the largest battery version. Let's assume the largest battery version comes with premium sound bundled together and this package costs $45,000. Let's say the Model 3 design studio shows that the price of premium sound alone is $2,000. In that case, $2,000 will be subtracted from $45,000 to calculate the price without premium sound. If the Model 3 premium sound price is unknown, the price of dual motors will be compared to the Model S and the same ratio will apply. For example, if Model 3 dual motors cost 75% of Model S, then we will take 75% of Model S premium sound price for the Model 3 version. If dual motors price is unknown, then Enhanced Autopilot will be used for the ratio. If both are unknown, then 80% of Model S prices will be used.

6. If the answer is published by Tesla before the poll closes or is leaked by other sources or tweeted by Elon, the poll will be considered closed immediately. You may still be able to vote after that but your vote won't count towards your score in the Tesla Predictions Competition. In other words, after the answer is already known, you can't use that information to answer this poll. Even if you do, your answer won't count.

Thanks

 

[tsla007]

Troy it's already known the cost of the battery/kw is 98.00 with new cells from GF.
From Panasonic it is 120.00/kw.
Ergo-the cost to the public isn't per kw but by kw per battery pack which adds more cost to it.
The cost the public or battery MSRP will be $175-195/kw as Elon stated in the past that they plan on making 50-75% profits off battery packs in the future. I wonder why or how they could sell the 15kw upgrade to S owners at 2000.00? That's only 133.00/kw and still make a profit?
Wow. That's an eye opener. I'll bet because they already considered the S to support model 3 and the overall profits from model 3 (mass produced) they sold them at cost to the public at that time.
Ergo-investors should be thrilled prices have dropped this far.
So in answer to your poll....to the public will be the 2nd one. I will not vote on it because it really doesn't mean anything to me to vote on something that I think is so obviously redundant.
I'm not trolling you. If you tightened up the range of pricing to nothing higher than 225/kw. then I might vote.
It's just too painfully obvious right now.

 

[Jayc]

I think we will have to pay around 225/Kwh for the upgraded battery (non-performance) but due to bundling of features, we might not get to know the true figure. With competition heating up, I also think it may be in the best interest of Tesla not to reveal actual costs.

 

[anonim1979]

None.
There will be only 75kWh battery. And all Model 3s will be ~300miles EPA.

 

[R.S]

Nice questions so far, but I guess this one will be the hardest to answer. What would you do, if they included 20" wheels on the bigger one, that aren't available on the smaller one, which can only come with 19s, just for example. The Model S has no 19-20 inch wheel upgrade.

A cool next poll could be the base price of the bigger battery version.

 

[R.S]

Troy it's already known the cost of the battery/kw is 98.00 with new cells from GF.
From Panasonic it is 120.00/kw.
Ergo-the cost to the public isn't per kw but by kw per battery pack which adds more cost to it.
The cost the public or battery MSRP will be $175-195/kw as Elon stated in the past that they plan on making 50-75% profits off battery packs in the future. I wonder why or how they could sell the 15kw upgrade to S owners at 2000.00? That's only 133.00/kw and still make a profit?
Wow. That's an eye opener. I'll bet because they already considered the S to support model 3 and the overall profits from model 3 (mass produced) they sold them at cost to the public at that time.
Ergo-investors should be thrilled prices have dropped this far.
So in answer to your poll....to the public will be the 2nd one. I will not vote on it because it really doesn't mean anything to me to vote on something that I think is so obviously redundant.
I'm not trolling you. If you tightened up the range of pricing to nothing higher than 225/kw. then I might vote.
It's just too painfully obvious right now.

Price per kWh on a Model S right now is $800. So what is the cost savings on the GF 70%+? Your calculations are only painfully obvious if you totally ignore everything but production cost guesstimations...

 

[Troy]

What would you do, if they included 20" wheels on the bigger one, that aren't available on the smaller one, which can only come with 19s, just for example.

We would apply rule #5 in the opening message. The price of the Model 3 wheel upgrade would be subtracted from the bundled price. If the Model 3 wheel upgrade price is unknown, a cheaper price will be calculated as explained in rule #5. Some options won't exactly match which is to be expected. The point you are making is the wheel sizes don't match, therefore the Model 3 version should be cheaper. Similarly, the Model 3 has a smaller paint area, therefore the metallic paint should cost less. Rule #5 takes care of these in a satisfactory way by calculating a cheaper price for the Model 3 version based on Model 3/Model S dual motor price ratio.

In addition, because the question is about price per kWh, the calculation to unbundle things will have a small impact. For example, assuming we end up calculating the Model 3 wheel upgrade should cost $1750 and you think they should cost $1500 or somebody else thinks they should cost $2000. Either case the difference between what you think the wheels should cost and what we calculated is $250 but then this number will be divided by the number of kWh. Let's say 15 kWh difference between smallest and largest Model 3 battery. That means only 250/15 ~= $17 effect on the answer.

 

[R.S]

In addition, because the question is about price per kWh, the calculation to unbundle things will have a small impact. For example, assuming we end up calculating the Model 3 wheel upgrade should cost $1750 and you think they should cost $1500 or somebody else thinks they should cost $2000. Either case the difference between what you think the wheels should cost and what we calculated is $250 but then this number will be divided by the number of kWh. Let's say 15 kWh difference between smallest and largest Model 3 battery. That means only 250/15 ~= $17 effect on the answer.

You definitely have the authority on that IMO, it's your game, but I think this one will spark the most complaints. Because you only need to argue about 1007 dollars more or less, and you have a margin of error as big as your $67 steps.

And there could be some things included that have no price on the current MS, bigger charger for example. Or the price of a special wood trim. So there might be some things open for interpretation, which will definitely lead to people complaining. That's an universal rule.

 

[Troy]

@R.S, if the largest Model 3 battery and some other option are bundled and the same option is not bundled with the smallest Model 3 version and the price of that Model 3 option is unknown and the option is not available in the Model S design studio, then I will start another poll to guess the price of that Model 3 option and we will use the average of that poll in calculations? Is that fair?

 

[R.S]

@R.S, if the largest Model 3 battery and some other option are bundled and the same option is not bundled with the smallest Model 3 version and the price of that Model 3 option is unknown and the option is not available in the Model S design studio, then I will start another poll to guess the price of that Model 3 option and we will use the average of that poll in calculations? Is that fair?

IDK to me your game is already fair, I just wanted to say that I think this single poll might cause complaints. I'd just add another sentence that you, as the game master, have authority over things like that. I don't think another poll to determine that options price will be necessary, then.

 

[Big-T]

Troy it's already known the cost of the battery/kw is 98.00 with new cells from GF.
From Panasonic it is 120.00/kw.
Ergo-the cost to the public isn't per kw but by kw per battery pack which adds more cost to it.
The cost the public or battery MSRP will be $175-195/kw as Elon stated in the past that they plan on making 50-75% profits off battery packs in the future. I wonder why or how they could sell the 15kw upgrade to S owners at 2000.00? That's only 133.00/kw and still make a profit?
Wow. That's an eye opener. I'll bet because they already considered the S to support model 3 and the overall profits from model 3 (mass produced) they sold them at cost to the public at that time.
Ergo-investors should be thrilled prices have dropped this far.
So in answer to your poll....to the public will be the 2nd one. I will not vote on it because it really doesn't mean anything to me to vote on something that I think is so obviously redundant.
I'm not trolling you. If you tightened up the range of pricing to nothing higher than 225/kw. then I might vote.
It's just too painfully obvious right now.

If we know the cost is under $100/kWh, how are the majority of people thinking the cost to the consumer will be In the $400 - $600 range per kWh? Elon said he hopes to get a profit margin of 25% overall and the general consensus seems to be he's going to loose money for a while. These are markups of 400-600%!!!

 

[SageBrush]

If we know the cost is under $100/kWh, how are the majority of people thinking the cost to the consumer will be In the $400 - $600 range per kWh? Elon said he hopes to get a profit margin of 25% overall and the general consensus seems to be he's going to loose money for a while. These are markups of 400-600%!!!

1. Elon has said he expects a 50-75% mark-up (or was it profit ?) on the battery
2. $100 per kWh is marginal cell cost. My WAG is $150 per kWh for marginal battery cost

UP to 150*1.75 = $262 per kWh for the consumer if markup
UP to 150/0.25 - $600 per kWh if profit

 

[R.S]

1. Elon has said he expects a 50-75% mark-up (or was it profit ?) on the battery
2. $100 per kWh is marginal cell cost. My WAG is $150 per kWh for marginal battery cost

UP to 150*1.75 = $262 per kWh for the consumer if markup
UP to 150/0.25 - $600 per kWh if profit

I'm not so sure, he said it's known, so he must have a point here...

 

[Troy]

... as the game master, [you] have authority over things like that.

Because I'm competing too, I want to avoid a situation where I pick the correct answer. Therefore when deciding on the scoring rules before opening a poll, I try to be thorough and cover all possible scenarios. However, in case there is a situation that is not covered in rule #5 in the opening message, I will not make a decision and we will have another poll.

Your wood trim example would fall into this category. Because the Model S design studio doesn't show a price for the wood trim, we can't use rule #5 to calculate a price for Model 3 wood trim by looking at the Model S version and applying dual motor price ratio or other criteria explained in rule #5.

 

[R.S]

Because I'm competing too, I want to avoid a situation where I pick the correct answer. Therefore when deciding on the scoring rules before opening a poll, I try to be thorough and cover all possible scenarios. However, in case there is a situation that is not covered in rule #5 in the opening message, I will not make a decision and we will have another poll.

Your wood trim example would fall into this category. Because the Model S design studio doesn't show a price for the wood trim, we can't use rule #5 to calculate a price for Model 3 wood trim by looking at the Model S version and applying dual motor price ratio or other criteria explained in rule #5.

But can the people vote objectively, if it alters their own end result?

 

[tsla007]

@RS your battery pack for your model S didn't come from the GF like the model 3 will.
The gf makes the cheapest lithium and highest quality around.
I do have more information than you straight from the source-so I really don't care how much you got ripped off.
Your loss.
If you can't handle that -go cry to mommy. It's a fact of the EV market we all have to accept.
When I got my S, I knew I was getting ripped off but wanted to support the EV move and Tesla for doing nearly all the leg work.
So, yes the cost to Tesla per kw for making lithium batteries IS 98.00 per kw. It's about 133.00 per kw in the battery pack.
Based on the 50-75% profit Tesla wants to make the answer is painfully obvious.

 

[R.S]

@RS your battery pack for your model S didn't come from the GF like the model 3 will.
The gf makes the cheapest lithium and highest quality around.
I do have more information than you straight from the source-so I really don't care how much you got ripped off.
Your loss.
If you can't handle that -go cry to mommy. It's a fact of the EV market we all have to accept.
When I got my S, I knew I was getting ripped off but wanted to support the EV move and Tesla for doing nearly all the leg work.
So, yes the cost to Tesla per kw for making lithium batteries IS 98.00 per kw. It's about 133.00 per kw in the battery pack.
Based on the 50-75% profit Tesla wants to make the answer is painfully obvious.

The thing I doubt isn't the price of the cells to Tesla, but your calculations after that.

You just assume too much and there are way too many variables. But it could be done so much easier.

Quick disclaimer: This is cost to the consumer, not to Tesla.

We know the Model S upgrade is $800/kWh. No assumption here.

We know the new cells are about 30% cheaper. That's an official number.

So $560/kWh.

Now you could argue that the S has a higher gross margin, than the 3 will have. And that is true, the S has 31%, according to the quarterly financial reports, whereas the 3 is planned to have 25%, according to Elon Musk (Tesla Model 3: Elon Musk sees the vehicle generating ~$20 billion in revenue with 25% gross margin (TSLA)).

So $450/kWh, if we assume the cost of battery to whole car ratio stays the same on the 3, as it is on the S.

See, no assumptions, no guesswork. Well, not totally, I assumed they will treat the Model 3 like the Model S, just being generally cheaper and I assumed all battery is profit. So in truth it might be a bit higher than $450/kWh, but it's a good lower limit.

Again, remember, this is cost to consumer, not Tesla.

 

[Troy]

But can the people vote objectively, if it alters their own end result?

Good question. If Tesla bundles some options with the largest battery Model 3 version (50% likely) but the same option is not also included in the smallest battery version (75% likely) and the price of that option is not shown in the Model 3 Design Studio (50% likely), and not shown in the Model S Design Studio either (20% likely), then we will have a poll to determine the price of that option and use the average of that poll.

The likelihood of all these things happening is 50%*75%*50%*20% ~= 4%. Therefore I wouldn't worry too much about it but I agree. People who participated in this poll should not affect the results of that other poll. Therefore, in the other poll, I will count only the votes that were not present in this poll. Additionally, if the other poll has less than 10 votes that are not present here, then it won't count and we will try a new poll. If this second poll also has less than 10 votes not present here, then it won't count either. I'm not sure what happens next. We can think about that if it happens. I think we are below 1% likelihood by this point.

 

[R.S]

Good question. If Tesla bundles some options with the largest battery Model 3 version (50% likely) but the same option is not also included in the smallest battery version (75% likely) and the price of that option is not shown in the Model 3 Design Studio (50% likely), and not shown in the Model S Design Studio either (20% likely), then we will have a poll to determine the price of that option and use the average of that poll.

The likelihood of all these things happening is 50%*75%*50%*20% ~= 4%. Therefore I wouldn't worry too much about it but I agree. People who participated in this poll should not affect the results of that other poll. Therefore, in the other poll, I will count only the votes that were not present in this poll. Additionally, if the other poll has less than 10 votes that are not present here, then it won't count and we will try a new poll. If this second poll also has less than 10 votes not present here, then it won't count either. I'm not sure what happens next. We can think about that if it happens. I think we are below 1% likelihood by this point.

You can't just make up likelihoods left and right. I am 99% sure the bigger battery version will have something standard. Just look at the "new" order page they tried for the S. And I am also 99% sure they will have some options only on the bigger version, lust like it is with the S. Now I can't put a number on how likely it is that the S won't have it, but I see a much higher chance than you do, for our problem.

Another topic I can think of is available motor power. What if the bigger battery version gets quicker to 60 and/or has a higher top speed. Is that worth more money? And how would you calculate it? You can't order just more performance. IMO that would be one case that will happen a lot more likely than just 4%.

And how likely is it that someone not interested in this game before, will vote on how much more extra performance is worth, however you define that term.

 

[JeffK]

2. $100 per kWh is marginal cell cost. My WAG is $150 per kWh for marginal battery cost

Elon has mentioned several times they are aiming for under $100 / kWh at the pack level not the cell level.

So, yes the cost to Tesla per kw for making lithium batteries IS 98.00 per kw. It's about 133.00 per kw in the battery pack.

Was that for Model S batteries or for Model 3? If it was for Model S then the 35% cost reduction provided by the gigafactory will put them right on target for pack level costs.