Monthly Archives: June 2016

Tesla Launches Two New Models Priced Lower than the S

Last Thursday, Tesla Motors announced that it would be creating two new, lower-priced versions of the Model S that could hit American roads by July of this year. The electric car and tech mogul stated that it hopes to make its vehicles more financially acceptable to more people. 

The Mosel S 60 will cost around $66,000 and the Model S 60 D will cost closer to $71,000. Both have a slightly reduced range compared to the original Model S, which was released in 2012 and costs somewhere around $76,000. 

model s3In a recent statement, Tesla put forward that owners of electric cars do save on fuel costs and that the effective price of ownership for the new Model S 60 was closer to $50,000. 

According to Tesla, the new models will be available to the public within the next six weeks, a standard lead time for the company. Individuals who place orders today can receive their cars as early as the month of July. 

The cars will have a range of 200 miles per charge and a maximum speed of 130 miles per hour. Both new models will be sold along with battery packs that have 75 kilowatt-hour capacities. In line with Tesla’s new and unique business model, the batteries will only have 60 kilowatt-hour capacities unless customers decide to pay up and unlock the battery’s full capacity. 

The decision to make hardware only fully utilizable by high-paying customers may seem like somewhat of a dick move, but Tesla has explained that its actually the company that is forced to pay extra for the model; after all, either way they’re forced to make the same hardware. It’s the Tesla customers that are given a less expensive option for the same hardware, yet another example of the electric car mogul’s attempts to make its expensive products more widely accessible to the general population. 

According to Tesla, the company plans to produce somewhere between 80,000 and 90,000 vehicles in 2016 and by 2018 hopes to launch that number up to 500,000. The company has stated that it expects most of these cars to be Model S cars. 

model s4Last year, Tesla also announced plans to create a more affordable car called the Model 3. The Model 3 retails for an affordable $35,000 and is projected to hit the market in 2017. The Model 3 has sent shock waves through Tesla and the electric car industry in general because of its immense popularity; the company has received just under 400,000 pre-orders for the car, prompting many experts to expect that Tesla will not be able to produce all the vehicles by the projected 2017 deadline. 

It’s not a bad prediction considering Tesla is still making the factories meant to make the cars. Electric vehicles and their batteries have never been made in bulk the way the 400,000 pre orders will call for, but Tesla CEO Musk has expressed confidence that bulk battery production will bring down the price of electric cars and play an instrumental role in making the technology inexpensive enough to enter the mainstream. 

Tesla shares recently plummeted as a result of Tesla’s offer to purchase Solar City. 

EV Batteries Already Cheaper than Expected

The major obstacle to incorporating eco-friendly electric vehicles into the larger market of more conventional, gas-fueled automobiles has been price. The batteries used for electric cars are often made of rare materials that are difficult to mine, and the cost of obtaining the materials generally transfers to the consumer. On top of that, batteries can be expensive to maintain in the long term, so not do consumers face a higher initial price but they also have to be prepared for pricey fixes down the road.

bats cheaperWhile the price of electric vehicles and their batteries in particular has been expected to remain a major issue for years to come, a new study published by the Climate Change section of Nature found that electric car batteries have actually decreased in price much faster than industry experts estimated. In fact, the batteries for electric vehicles already cost significantly less than what analysts believed the prices would be in 2020.

In 2013, the International Energy Agency made a famous estimate that it would take until 2020 for lithium cell batteries to sink below $300 per kilowatt-hour. However, researchers have stated that the electric car industry has already reached that goal, or at least some companies have. On an industry-wide level, costs were floating around $1,000 per kWh in 2007, but dropped to as low as $140 per kWh by 2014. The study has aslso claimed that some “market-leading firms” like Nissan, which has sold the most EV models to date and Tesla, which has hundreds of thousands of orders lined up for its much-awaited Model 3, have beaten the $300-per-kWh expectation by a long shot.

The study backed up its findings with 85 cost estimates from peer-reviewed academic publications in addition to reports from analysts, the media, and those taken from battery and car manufacturers. While the authors have done a fair amount of research, they were also quick to note that they still aren’t working with a complete body of data in that companies rarely disclose their true costs of manufacturing to the public.

tesla2The authors were also straight-forward about the fact that battery costs still need to drop a good deal further in order to attract the mass appeal of cheaper, gas-fueled cars. They stated that in the United States, for example, the costs must drop to less than $150 per kWh for electric cars to move “beyond niche applications.”

The exact threshold at which point EVs will become price-competitive with internal-combustion models remains difficult to isolate, but many guess that cells would need to run at somewhere around $100 per kWh.

Huge efforts are currently underway in terms of finding alternatives to today’s lithium-ion chemistries. Volkswagen is considering investing in the development of solid-state batteries for future electric cars, though many developments on car batteries remain purely experimental and fairly distant from actual release in the auto market.

Tesla Motors has gained a fair amount of attention for attempting to bring battery prices down by entering economies of scale. It has created an enormous “Gigafactory” in Nevada, where it hopes to create a factory large enough to realize the $35,000 base price for its Model 3 sedan.