Profitability: Telsa's Battery Strategy Vs. Nissan's

1803 Views 16 Replies 7 Participants Last post by IamIan, Jan 1, 2011

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Discussion Starter · Dec 31, 2010

$57,000 Tesla Model S electric car, which uses cells similar to those in laptops, is designed to make money at 20,000 annual deliveries.

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IamIan

· #2 · Dec 31, 2010

Tesla's Strategy leverages a already massive , well established small cell battery industry ... Laptops , Cells phones , I-Pods, etc ...

It will be a long time before HEV or BEV battery industry grows enough to significantly surpass this already massive and well established battery industry... and it isn't like the established battery industry will sit stationary and wait ... they are constantly improving little bit by little bit.

The only significant down side I see to Tesla' method ... is added complexity.

But , so far they have seemed to be handling the added complexity rather well... this complexity , like other computer chip industries , will most likely continue to become easier, less expensive, and more durable over time.

JRP3

· #3 · Dec 31, 2010

I have to admit I thought the Tesla pack model would already be outdated by now due to the added complexity and pack assembly costs, but they seem to have it sorted well enough to be competitive.

david85

· #4 · Dec 31, 2010

It also gives them something to improve on as time goes on and a reason for loyal customers to trade up as better cars come out. When it comes to marketing, one of the worst mistakes many pioneers make is attempting to produce the absolute best product right out of the door. Usually this results in something that is too expensive, too complex, lasts too long, or worst of all "ahead of its time". Or as was the case with the brickin SV2, an idea that never got off the ground.

I personally wouldn't buy a car that might need a new battery in as little as 5 years but if tesla can sell these things than all the power to them. The first PCs were far from perfect and few people could buy those but you have to start somewhere.

The fire cracker style cells that tesla is using are not my first choice but they are at least plenteful and consistent in quality after a good ~10 years of industrial scale mass production. LiFePO4 is more reliable on paper, but also less certain do to younger age (energy density is also a concern).

I think their pack design is very much out dated, but when you consider the other factors it really doesn't matter.

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JRP3

· #5 · Dec 31, 2010

Right now it can't be beat for cost to density ratio, if their cost claims are accurate.

david85

· #6 · Dec 31, 2010

JRP3 said:
Right now it can't be beat for cost to density ratio, if their cost claims are accurate.

Yup. Thats the difference between building something great that nobody can afford and successfully marketing something that is good enough.

The only other real option could be lithium polymer but that is roughly twice the cost. Everything else is in various stages of experimental testing or is otherwise untested on the scale that good old fashioned LiCO2 18650 cells are. (I think tesla used the 18650 sized Li-ion cells???)

JRP3

· #7 · Dec 31, 2010

Yes 18650 commodity cells, highest volume cells in production I think, with a nice increase in density from 2.4ah in the Roadsters to 3.2ah in the next generation, maybe 4ah in a year or two.

Duncan

· #8 · Jan 1, 2011

I still have difficulty with the notion that I can buy cells at $300/kwhr
(TS cells at $1/Ah)
and Nissan is working on getting it down to $700/Kwhr?

Even Tesla's $200/Kwhr seems too high to me

LithiumaniacsEVRacing

· #9 · Jan 1, 2011

Automakers often do comparison ads showing how their features or specs are better than their competitors', but they don't generally trash other makers' designs in public.
Like so many conventions, this one doesn't seem to apply to Elon Musk, CEO of venture-funded startup Tesla Motors [NSDQ:TSLA]. He savaged the "primitive" design of the battery pack in the 2011 Nissan Leaf, the all-electric hatchback that will go on sale in December.

The comments came at during a conference call with investors discussing Tesla's second-quarter loss. following its June initial public offering.
They expanded, more bluntly, on concerns expressed by former Tesla marketing honcho Darryl Siry and others over the Leaf's air-cooled battery pack.

Unlike the water-cooled packs of the Tesla Roadster and the 2011 Chevrolet Volt, which use radiators to dissipate heat, the Leaf must use ambient air and fans to cool its lithium-ion battery. Temperature extremes--whether -25 or 120 degrees F--can make air cooling is a challenge.

Musk said the production Leaf used a "much more primitive level of technology" than anything Tesla had considered putting into production, and predicted that the Leaf's pack would experience "huge degradation" in cold weather and essentially "shut off" in hot temperatures.
Nissan has warrantied its battery pack for 8 years/100,000 miles (as has Chevrolet for the 2011 Volt), which should reassure consumers anxious over the prospect of a five-figure replacement battery pack several years into their ownership.
Every carmaker simulates harsh duty cycles on its battery pack designs before they're approved for production. General Motors has done several tours of its battery laboratory during Volt development, and Nissan surely has a similar lab.

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JRP3

· #10 · Jan 1, 2011

Duncan,
You're talking un-assembled cell costs and I think they are talking pack costs, different animals. Also the LiCo and LiMn cells have higher density than our LiFePO4 cells.

JRP3

· #11 · Jan 1, 2011

LithiumaniacsEVRacing said:
Automakers often do comparison ads.....

It's a good idea to link the original source and use quotes when copying and pasting another person's material.
http://www.allcarselectric.com/blog...-sneers-at-primitive-2011-nissan-leaf-battery

LithiumaniacsEVRacing

· #12 · Jan 1, 2011

The same quote was copied on about 50 different news sources, didn't think it made a difference.

JRP3 said:
It's a good idea to link the original source and use quotes when copying and pasting another person's material.
http://www.allcarselectric.com/blog...-sneers-at-primitive-2011-nissan-leaf-battery

Duncan

· #13 · Jan 1, 2011

Hi JRP3

I understand the difference - but coming from a mass production background I don't understand the costs,

If I can buy one for say $10 then part of that $10 is the cost of dealing with an individual
The production costs would be much less

The assembly costs should be minimal
Cummins could sell a complete 300Hp 6 liter diesel engine to Chrysler for less than $2,000 in 2001

If I could build a pack for $12K then Nissan should be able to build it for $4K

Of course they may not want to tell us, at the time when Cummins was getting $2,000 for an engine Chrysler was charging a premium of $6,000 for a diesel Ram
And the petrol engine has got to have cost something!

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PhantomPholly

· #14 · Jan 1, 2011

LithiumaniacsEVRacing said:
Automakers often do comparison ads showing how their features or specs are better than their competitors', but they don't generally trash other makers' designs in public.
Like so many conventions, this one doesn't seem to apply to Elon Musk, CEO of venture-funded startup Tesla Motors [NSDQ:TSLA]. He savaged the "primitive" design of the battery pack in the 2011 Nissan Leaf, the all-electric hatchback that will go on sale in December.

The comments came at during a conference call with investors discussing Tesla's second-quarter loss. following its June initial public offering.
They expanded, more bluntly, on concerns expressed by former Tesla marketing honcho Darryl Siry and others over the Leaf's air-cooled battery pack.

Unlike the water-cooled packs of the Tesla Roadster and the 2011 Chevrolet Volt, which use radiators to dissipate heat, the Leaf must use ambient air and fans to cool its lithium-ion battery. Temperature extremes--whether -25 or 120 degrees F--can make air cooling is a challenge.

Musk said the production Leaf used a "much more primitive level of technology" than anything Tesla had considered putting into production, and predicted that the Leaf's pack would experience "huge degradation" in cold weather and essentially "shut off" in hot temperatures.
Nissan has warrantied its battery pack for 8 years/100,000 miles (as has Chevrolet for the 2011 Volt), which should reassure consumers anxious over the prospect of a five-figure replacement battery pack several years into their ownership.
Every carmaker simulates harsh duty cycles on its battery pack designs before they're approved for production. General Motors has done several tours of its battery laboratory during Volt development, and Nissan surely has a similar lab.

Interesting argument. Many have argued that liquid cooling is "superior" - yet note that 1940's technology air-cooled motors dominate in aviation

Note, too, that electric cars face many of the same challenges as small aircraft.

The Tesla approach is interesting in that they leverage the high-volume production of small cells. That approach requires a more complicated cooling system. However, for the "big boys" to get into the game without such labor-intensive pack assembly requires equally ingenious thinking and low-tech solutions. Both are valid approaches in their own way, and only time will tell who is the winner.

JRP3

· #15 · Jan 1, 2011

Duncan said:
If I could build a pack for $12K then Nissan should be able to build it for $4K

They probably can build your $12K pack of LiFePO4 for less, but the LiMn cells they use are not the same thing nor do they cost the same as TS/CALB LiFePO4. They have a higher energy density and are presumably made to closer tolerances in regards to capacity and internal resistance. I'm pretty sure the TS/CALB cells we use are also made in greater volume at this point than Nissan's LiMn cells so we actually have economies of scale in our favor. As Nissan ramps up production and actually starts selling vehicles in volume this should lower their costs as well and hopefully lower prices and/or allow longer range. There is room in the LEAF for about twice the battery pack but it would be a $50K vehicle at today's prices.

JRP3

· #16 · Jan 1, 2011

PhantomPholly said:
Interesting argument. Many have argued that liquid cooling is "superior" - yet note that 1940's technology air-cooled motors dominate in aviation

Agree. If it can work, simpler is better. Musk is obviously ignoring the possibility that Nissan's LiMn cells handle temperature extremes better than Tesla's LiCo cells and therefor don't need such an aggressive climate control regime. A Telsa Roadster left unplugged for an extended period can drain it's pack while trying to actively heat or cool it, a LEAF, and my car, won't do that.

IamIan

· #17 · Jan 1, 2011

As I recall 3 years of battery pack development for the Tesla battery pack was completed in ~2006 ... Which means they were working with ~2003 tech ... which should be kept in mind when comparing to current day options.

The cells they use ~6,800 ~50g 18650 cells ... ~340 kg of cells ... containing 53 kwh of capacity ... that's ~156 wh/kg ... with another ~110 kg of connections , battery box / enclosure , BMS , coolant , etc ... all together they bring it in at 450kg ( ~117wh/kg )... Discharging at a hair from 4C ( ~444W/kg ) ... for ~8 year old tech ... that would have been hard to beat without spending allot more money then they did.

Using Tesla's Approach ... a modern 18650 cell can be had for ~207wh/kg ... ~32% improvement in ~8 years ... and continue to improve in performance and cost due to market demands that Tesla doesn't have to pay for ... beating 207 wh/kg current day tech is hard to do ... even harder if you plan to try and beat the $/kwh of that mass produced product at the same time.

Last I heard ~2009 ... Tesla was at that time charging ~$36,000 for a completely new battery pack... or ~$679 / kwh... I am not sure how much of that is profit for them ... but I suspect the ~$200/kwh is from what the company expects the batteries to cost them by ~2016... sense they are offering current Tesla customers an option to buy a replacement 53 kwh pack for $12,000 to be delivered in ~2016.

IF by ~2016 Tesla does manage to pull that off ... that will be very hard for any DIY to compete with a full 53 kwh ESS ( battery pack system ) all parts , sensors, connections, etc ... with warranty for less than ~$12,000... or ~$226/kwh retail.

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