As can be seen from the $30k difference in price between the 500 and 300 mile range semis, the cost for Tesla to produce the battery packs for Semi appear to have plunged.
Assume: 900kWh pack = 540kWh for 300mi = 360kWh for $30k = $83/kWh; assuming the usual 25% margin = $67/kWh. This is actually getting close to - but still plausibly above - raw materials costs for the packs, which should be somewhere around $50/kWh. Approaching raw materials prices has, after all, always been a goal of gigafactory.
But this isn't the point of this discussion; the point is something else entirely. Namely: Tesla's promise of $0,07/kWh renewable electricity for the trucks.
I think some of us may have blown this off as read-the-fine-print hype. Along the lines of "they'll just put up solar awnings which contribute an insignificant fraction of the total, and call that solar energy". But even if we were to assume that, how do we account for the $0,07/kWh power costs? That's cheaper than commercial rates, ignoring the expensive demand charges, and Tesla has a lot of capital costs to amortize (chargers, powerpacks, etc). For example, the recent project to deploy 100MW/129MWh in Australia cost $50M. A typical 8-stall supercharger station without a battery buffer is said to cost $250k, and that's 1/12th the power, so that's meaningful, but the real issue is those powerpacks - there's serious capital costs here!
Industrial power rates are usually in the $0,06-0,07/kWh range. But with industrial power, you pay for all of the connecting infrastructure and a lot of additional overhead. And again, what about the megacharger capital costs?
Some analysts have suggested that the Megacharger stations are a temporary loss leader to sell trucks - that by selling power for cheaper than they can buy it, they're just deferring costs to the future, to a time where they have more revenue and better economics, while in the meantime jumpstarting a switch to electric semis which won't revert. But that would be a hugely expensive loss leader - and selling T-shirts in a truck stop certainly won't pay for it.
I think there's something much bigger that we're missing here, and it comes down simply to:
look at the costs on those battery packs. Tesla has stated that Semi is using the same battery chemistry as their grid storage products (aka, NMC). Meaning that
these figures should also be directly applicable to future powerpacks. So: 8 stall megacharger storing 12 hours of power with a 30% usage rate and 1MWh allocated per vehicle charge? Only $4m (for 58MWh). This says nothing about Tesla's costs in transforming power, only that in terms of storing it,
their powerpack costs should be going way, way down.
But here's where things get interesting. Let's double our battery size to 24h / $8m. Add in a (proportionally) small grid link as backup (or a peaking plant - NG or biomass).
Now build your own solar farm. Not mere solar awnings, but a whole solar farm somewhere near the megacharger. Musk said the megacharger stations will be solar powered - let's try taking him at his word. You have a battery buffer and a grid backup; it's effectively baseload. Solar is getting almost absurdly cheap, with average plants coming in at $1,5/W installed (and falling). Let's go with a 25% capacity factor and $1,2/W. Our 8-stall megacharger is averaging ~5MW (counting losses). That's a $24M plant. Add in various overhead (such as transmission to the megacharger) and say $28M. Let's amortize (3% interest) the battery pack over 15Y ($55k/mo) and the solar plant over 30Y ($118k/mo). So $173k/mo (omitting any backup / grid costs). The megacharger takes in $245k per month in charging fees - +$72k/mo in the black. So long as everything else (backup, chargers, facilities, etc) is less than $15M amortized over 25 years, the station as a whole is in the black - before accounting for "truck stop sales" (which are where most gas stations / truck stops today make most of their money).
And solar prices keep on falling. In India some plants are coming in nearly down to $0,60/W. US prices may well average under $1/W in a few years - and expect Tesla to try to stay on the forefront of that curve. Solar capacity factors will of course vary depending on location (wind is also an option), but then again, the above 25% is lower than the current US average. Now, maybe Tesla will want longer than a 24h buffer - maybe 48, even 72h, to reduce the required backup grid connection / peaking needs - but even that shouldn't ruin the equation. 15Y is the current expected lifespan of powerpacks, but it may improve, and Tesla gets to recycle them at the end for those raw materials (which are, as noted, increasingly a large chunk of the battery costs). The solar plant should last longer than 30y (although assuming limited lifespans on the powerpacks and solar farm helps account for maintenance costs, which aren't listed above). Seasonal fluctuations change solar power output, but then again, Tesla can sell excess solar power in high times just as readily as they can buy grid power in low times; solar tracks demand well. In short: I think they can actually do this. Tough? Yeah. And they'll need to prove their economic case to get those kind of interest rates. But I think they can do it.
What happened here to make it possible? Two things.
- Solar is cheap... with a catch: The low cost of solar power comes with peaking requirements; it needs to be buffered for the night and days with little sun. But the megachargers need their own battery buffer either way. Tesla gets a two-for-one here.
- Tesla appears to have changed the game on grid storage prices. Seriously, if they can manufacture storage for under $70/kWh and sell it for $85/kWh or so with a 25 margin, solar and wind have just become a lot cheaper and easy to deploy for everyone.
In short, this what I think is going on with those pricing figures. And if there's any word that describes the implications, it's this:
profound.