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Elon Musk dismisses his competitors gains in battery tech costs, stating that his company is the only one to currently produce EVs that are reliable at a full range of standard temps from blazing hot to icy cold.  (Source: Brendan McDermid / REUTERS)

Tesla says it has big improvements in store for its upcoming $57,400 2013 Model S electric.  (Source: Tesla Motors)
Remarks come in the wake of Nissan bragging that it is far ahead of competitors

If there's one main factor that is turning people off from truly considering electric vehicles for their next purchase, it is the price.  Thus when Nissan claimed to have reached production costs of $375/kWh for its upcoming 2011 Nissan LEAF EV, it turned heads.  After all, most auto companies were saying that they hoped to reach $400-$700/kWh with their upcoming models.

Tesla Motors CEO Elon Musk is not impressed with Nissan's claims, though.  While he does not comment much on the battery cells themselves, during a call to analysts and investors he blasts Nissan's supporting systems, saying that they are more primitive than his company's first prototype.

At issue is the fact that the LEAF uses air cooling for its batteries, while Tesla uses a superior liquid heating/cooling thermal management solution.  By opting for the cheaper air cooling, Musk says Nissan's battery temperatures will be "all over the place".  Worse yet, he says that they will undergo "huge degradation" at colder temperatures, and literally "shut off" at warmer ones.  Competitor GM has stated that its 2011 Chevy Volt EV may have similar issues.

Tesla Motors' current system for the Roadster sports over 6,831 laptop-sized battery cells designed for automotive use.  It packages cells together in modules and then places modules into a full pack.  Each module is equipped with liquid cooling and temperature sensors.  Firmware controls the rate at which the cooling fluid (or heating in cold weather) is pumped through the system, responding to changes in heat.

Despite having a huge profit margin on its current Roadster, Musk says that his company is "giving up" hopes of overall profitability in exchange for "pretty astronomical growth."  Tesla is instead opting to spend up to $500M USD (currently its hoping to stick to under $400M USD) to develop its new Model S electric vehicle.

Musk says the new vehicle will sport significant improvements to its battery.  It will feature 50 percent more density per module -- meaning that it will pack 3 cells into a similar sized module for ever 2 of the Roadster's pack.  It also ditches the expensive all-cobalt electrode in favor of a nickel cobalt aluminum cathode (positive electrode).  The new composite cathode will be much cheaper, while not significantly impacting performance.

The company has not revealed the cost per kWh that it's targeting for the Model S.  In 2009 the industry average, according to a Deutsche Bank report [PDF], was $650/kWh, but current orders being placed for the 2011/2012 timeframe are averaging $450/kWh.  The rapidly dropping prices are helping to cut the cost of laptop batteries as well, which are priced at $350/kWh, according toLG Chem subsidiary Compact Power’s CEO Prabahkar Pati.  Pati says that low price is a sign of things to come for the auto industry.

Tesla Motors plans on having an "Alpha" version of the Model S built later this year.  That version will be 80 to 90 percent complete in terms of production intent.  Then next year it will build a "Beta" version, which will be 99 percent complete.  The production Model S is launching in 2012 priced at $57,400 USD.

While that price may seem high, price inflation may make it more competitive.  Some dealers of the upcoming Volt EV are reportedly adding $10,000 to $20,000 USD markups on to its base price, raising the cost to as high as $61,000 USD before tax credit.

Still pressure is on for Tesla, which lost $38.5M USD in its last fiscal quarter, bringing its total losses for the year to $68M USD -- over $10M USD more than it lost 
all of last year.  The company has an upcoming contract with Toyota to produce an electrified RAV4 that also promises great future payoffs, but at the present is sapping cash.

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Both are primitive tech
By corduroygt on 8/9/2010 11:56:36 AM , Rating: 3
$375/kWh looks good until you consider a 15 gallon gas tank costs about $300 and stores over 500 kWh of energy at a cost of 0.6$/kWh.

RE: Both are primitive tech
By bobsmith1492 on 8/9/2010 2:12:06 PM , Rating: 2
But, then the batteries can be recharged at a rate of ~$.1/KWh (electricity)... eventually they'll break even if the battery lasts long enough!

RE: Both are primitive tech
By moenkopi on 8/9/2010 2:38:05 PM , Rating: 5
They will break even if gas costs $3/gal, then it will be 80000 mile break even point, assuming you have the latenight charging plan at 6cents/kwh. That doesn't even include the lower maintainance.

RE: Both are primitive tech
By Solandri on 8/9/2010 10:26:52 PM , Rating: 2
The Nissan LEAF costs $32,780k and is supposed to have a 42 kWh battery pack and 100 mi range. 80,000 miles means 800 recharges. It can be charged to full in 20 hours @ 120 V and 20 Amps, which is 48 kWh (87.5% charging efficiency). To get the overnight electricity rates, you will need the 8 hour 240 V 40 Amp charger (54.7% charging efficiency) which consumes 76.8 kWh to charge the pack. At $0.06/kWh, 800 charges to full will cost you $3686.40.

Looking at similar compact gasoline cars, I'll compare to the Civic since it's the most popular car in the size class, expensive (helps the LEAF out in the comparison), and gets about average gas mileage for the class. 25 city, 36 highway, call it 30 MPG average. Costs $16,255. Over 80,000 miles it will burn 2667 gallons, which at $3 gal will cost $8000.

So @ 80k miles, the LEAF has cost you $32,780 + $3686.40 = $36,466. The Civic has cost you $16255 + $9600 = $25,855. It's only after you factor in the $7500 federal tax credit, a $1500 state tax credit, and factor in $3000 for maintenance costs on the Civic that the break-even point is at 80k miles.

Without any tax credits, if you figure 15,000 miles per year and $600 maintenance per year, the purely flat economic break-even point is after 11.7 years, or 176,000 miles.

RE: Both are primitive tech
By greveeghesduiff on 8/9/2010 10:58:40 PM , Rating: 2
supposed to have a 42 kWh battery pack

It has a 24 kWh battery pack.

If the car has a 100 mile range on a 24kWh pack then it gets 240 Wh/Mile.

If you have the national average $0.10/kWh electricity, then
100,000 miles * 240 Wh/mile == $2,400 for 100,000 miles of driving.

The Civic cost $10,000 for 100,000 miles at 30 MPG and $3.00, for only the gas.

Several places put the sticker price for a 2010 Civic (standard) is ~$22k (only $3k less then the Leaf).

Plus after all of that, you end up driving a Civic. :)

RE: Both are primitive tech
By Solandri on 8/10/2010 7:09:48 AM , Rating: 2
Thanks for the correction on the battery pack size. But that doesn't change my cost calculations. Charging a battery is hardly a 100% efficient process, especially if you want to do so reasonably quickly. The charger specs I got are from the manufacturer's website, which seems pretty authoritative:
A: It takes about ~30 minutes to 80% at a 480 volt quick-charge station. Starting from a depleted battery, ~8 hours at 220/240V (depending on amperage), about 20 hours at 110/120V.
A: It will charge on a regular 110/120V 20-Amp dedicated outlet. This is considered a "trickle charge," which means it would charge at a slower rate. For home charging, we recommend a home charging dock on a dedicated 220/240V, 40A circuit.

240 V @ 40 A for 8 hours is 76.8 kWh to charge the battery pack, not 24 kWh.

The price I used for the Honda Civic was the MSRP for the 2010 base model with automatic transmission. I wasn't able to find any info on the LEAF's trim models, so I assumed they followed the standard in the automotive industry and gave the lowest price of the lowest trim model.

RE: Both are primitive tech
By corduroygt on 8/10/2010 4:13:25 PM , Rating: 2
You should also add the cost of a car rental any time you want to go somewhere more than 80 miles away to the price of the Leaf.

RE: Both are primitive tech
By RedmondChad on 8/13/2010 6:15:30 PM , Rating: 2
Solandri, you still have a problem with your electricity cost calculations. The charging overhead is nowhere near what you're suggesting, it's only about 10%. The amps decline at the end of charging, so not as much energy gets put in to the pack. You can't figure it by multiplying a suggested charging time by amps and volts.

3 miles per kWh is a good metric from other EVs (many owners put meters on the outlet to measure it); that includes all charging (and other) overhead. To cover 100k miles, you will need around 33.3kWh.

You also neglected to mention that the base Leaf is equipped much better than the base Civic. And with no emissions inspections or oil changes, maintenance costs will be lower. (My 7.5-year-old EV has seen nothing but wiper blades and tires). And that gas prices are a lot more likely to rise than electricity prices. I think the Leaf is going to be astoundingly cheap to own; although of course nobody can prove anything either way because it all depends on assumptions about the future.

But all of that is beside the point, anyway. Why does a solution that helps our economy (buy less AND buy local), improves our country's strategic position (no dependence on the Middle East), pollutes less (unless you're in the ~1% of the population that gets all your power from coal--then it pollutes about the same), and reduces carbon emissions have to cost less? I'm willing to pay quite a bit extra for it.

RE: Both are primitive tech
By homebredcorgi on 8/9/2010 4:47:03 PM , Rating: 1
But of that energy in gasoline, only 10-15% gets to the wheels (you're actually thermodynamically limited to about 60% efficiency in the first place), while a good electric motor and transmission should get you into the ~75% efficiency range at least.

RE: Both are primitive tech
By corduroygt on 8/9/2010 5:17:11 PM , Rating: 2
Prius has 29% wheel to well efficiency, and there are also losses from the way the powerplant generates electricity (about 50% for gas turbines) until it comes to your outlet.

RE: Both are primitive tech
By Alexvrb on 8/10/2010 12:00:47 AM , Rating: 2
Bingo. Prius and other efficient gas burners do much better than some of these low numbers people like to sling around.
When it comes to EVs they never factor in losses at the plants (if it's a gas/coal plant, for example), in the transmission lines, during charging, losses from the battery operating conditions, in the eletric motor(s), and maybe other drivetrain parts (depending how it is configured, trans, diff, etc).

RE: Both are primitive tech
By RedmondChad on 8/13/2010 6:22:32 PM , Rating: 2
Well, they never factor in the losses unless it's a scientific study. (Just like most people don't count in the costs of finding, extracting, transporting and refining petroleum--unless it's in a good study). There's been dozens of studies. Sherry Boschert has reviewed about 60.

There are minor differences between them because some have different assumptions, and they don't all account for the same things. But the overall consensus is that absolutely worst case (all electricity from coal), an EV and a gas car are pretty equivalent in terms of pollution and carbon emissions.

Of course, that worst case only applies to about 1% of the population. And you can clean up power generation later, whereas a dirty car stays dirty. And even when pollution is equal, the EV still wins on economic and energy security criteria.

The difference between mass market and high end
By nafhan on 8/9/2010 10:19:53 AM , Rating: 5
Tesla Roadster: $100,000+
Nissan Leaf: $32,780
Is anyone surprised that tech in the Leaf is not quite as robust/advanced? I guess Mr. Musk is saying is that electric vehicles aren't ready for prime time: either spend $100,000 or get crap.

By cmdrdredd on 8/9/2010 10:23:51 AM , Rating: 1
What I really see is the game little kids play... "yeah well, Superman can shoot lasers out of his eyes!"

Basically he's upset his company isn't doing very well and he's not the only player on the block able to charge exorbitant sums of cash for their cars. There's not alternatives that are less expensive and he can't continue to be elitist and win.

By danrien on 8/9/2010 1:13:03 PM , Rating: 2
yeah what an idiot... *rolls eyes*

c'mon guys, he's only promoting his company's products. why would he call their tech anything more than what it is?

By Reclaimer77 on 8/9/2010 1:26:52 PM , Rating: 3
You can promote your products without slamming others. He chose the latter. It makes him look arrogant, obnoxious, and condescending. Especially given that Nissan is a company who sells cars and makes money, his is one who should rightfully be bankrupt by now in all honestly.

He also sounds completely oblivious to the fact that his products "tech" costs 5 times more than Nissan's. Maybe there's a reason for that?

By cruisin3style on 8/9/2010 2:33:14 PM , Rating: 2
Maybe you've read how much the R&D costs or something, but if you're talking about the cars costing 5 times as much I think it is time to do some math:

109,000/101,500 = tesla base price with/without tax credit
32,780/25,280 = nissan leaf base price with/without tax credit
~3x/4x = difference in pricing

so neither is near 5x...

When you consider the whole poitn of the article is the model S, the difference is more like 2x after credit

RE: The difference between mass market and high end
By FlyBri on 8/9/2010 9:51:52 PM , Rating: 2
He doesn't come off as an idiot at all. A lot of you aren't being fully aware of the situation. First off, he said what he said "during a call to analysts and investors". His job as CEO is to promote his company and brand and show how superior their technology is to the fullest extent. If a competitor does have a lesser tech, and one that has some major issues (the battery temp issue has already been well documented), he has every right to slam it.

Secondly, is that he is responding based off what was used as the subtitle in this post, which is: "Remarks come in the wake of Nissan bragging that it is far ahead of competitors". Um, so if another company that has "primitive" tech (compared to yours) is bragging that they are far ahead of their competitors, and you are a competitor that actually has better tech than them, you have EVERY right to slam them.

By knutjb on 8/10/2010 1:43:52 AM , Rating: 2
Of course he is selling, this company is in severe financial troubles and needs more capital infusions to keep from disappearing.

By MrBlastman on 8/9/2010 11:09:38 AM , Rating: 1
The only difference between Nissan and Tesla is...

Nissan sells cars and makes money... Tesla just dreams about it.

By sleepeeg3 on 8/9/2010 11:50:26 PM , Rating: 2
Seems like JM or someone higher up at DailyTech has stock in Tesla.

By Reclaimer77 on 8/9/2010 11:05:11 AM , Rating: 4
Ferrari CEO Amedeo Felisa is not impressed with Ford's Eco Boost system....

By SublimeSimplicity on 8/9/2010 11:37:49 AM , Rating: 2
This would be an even closer parallel if Ferrari was putting Ford Eco Boost engines in their cars with slightly more advanced turbochargers.

By GWD5318 on 8/9/2010 8:38:58 PM , Rating: 2
Ah, Ferrari's still pissed about the time that Ford tried to buy them. True, the buyout failed, but then Ford beat Ferrari multiple times at LeMans just to punish them.

Ferrari's had a mad-on at Ford ever since.

By AssBall on 8/9/2010 8:59:49 PM , Rating: 2

Nasa administration is not impressed with Russia's Soyuz astronaut delivery System.

Is there a parallel here? I think so :)

By MrFord on 8/10/2010 9:30:04 AM , Rating: 2
NASA can't complain, because they will soon have to subcontract them to bring astronauts to space. That would be a bullet vs foot situation.

By BernardP on 8/9/2010 11:06:20 AM , Rating: 2
It is a given the all-electric car is not yet ready for general use. Nissan is trying for an affordable, urban car niche. Tesla is pursuing another, narrower, niche, that of the high-priced, specialty car.

Nissan has sales of conventional cars to support its losses on the Leaf. Tesla has stock sales and government money to do the same thing.

Will Tesla still be around in 5 years?

By serkol on 8/9/2010 11:34:11 AM , Rating: 2
Will Tesla still be around in 5 years?

I think, as a brand: Yes. As a company: No. It will be bought by Toyota after the success of Rav-4 EV.

By RedmondChad on 8/13/2010 6:29:26 PM , Rating: 2
Why is it a given that the electric car is not ready for use?

My wife drives one that was designed in the 90's (a Toyota RAV4-EV that was briefly sold in California). It's awesome, the best car we've ever had. We liked it so much we bought another electric car.

And no, we don't just take short trips. I've gone on a 3,000 mile trip in mine. It's not just something I can live with and make work--it's more convenient than gas. OK, there was a tradeoff on that long trip; but the ease of charging rather than getting gas the rest of the time more than makes up for it. I'll never drive gas again; I like electricity much better.

If you are still afraid of the range issue (which is really not a problem with range; it's a problem with recharge time, which is being addressed): Fine, buy a Volt! No range issue, but most of your miles will be electric-powered. I'm perfectly happy with that.

Lease rather than buy (I don't know why the buying price is so high when the lease cost is so low), and don't foreget to subtract your gas costs. It's really cheap!

For 58 grand...
By ianweck on 8/9/2010 1:37:09 PM , Rating: 3
...I hope his battery is more advanced than the Leaf's.

RE: For 58 grand...
By mmcdonalataocdotgov on 8/10/2010 11:45:47 AM , Rating: 2
Elegantly put. That was all that needed to be said.

The difference is...
By GWD5318 on 8/9/2010 8:44:49 PM , Rating: 2
that Musk is trying to sell high-performance electric toys to eco-douches and Nissan is selling a car to commuting car for everyday use to (a relatively well off) public .

RE: The difference is...
By GWD5318 on 8/9/2010 8:46:27 PM , Rating: 2
We need an edit button guys!!!

What I mean to say is that: "selling a commuting car for everyday use to (a relatively well off) public .

The greatest gamble
By brokenaxiom on 8/9/2010 11:15:22 AM , Rating: 3
I first though that Tesla was just a novelty of the eco-hippie movement, but now I believe they are the real deal. They have the production plant. They seem to have the technology. And now they are building the corporate connections necessary for widespread distribution. I suspect Tesla will eventually enter a dealership sharing agreement with Toyota sometime in 2012.

Now the real question is can they make money? Nobody knows, but that's the American story. A crazy innovator changes the entire market. However, we fail to mention the ten who tried and failed.

By chunkymonster on 8/9/2010 3:21:46 PM , Rating: 2
I highly support Tesla Motors and their work to make an affordable all electric vehicle and I predict that Tesla will see a huge success with the Model S.

Tesla deserves the full support of the American car buyer when you consider that a start up car company coming out of no where is releasing an all electric family sedan (Model S) that has a range up to 300 miles. That is actually enough miles per charge to allow the every day driver to truly ditch gasoline powered cars and go all electric.

If Tesla Motors fails it will not be due to a lack of sales or innovative and attractive products on their part but due to the government, lobbyists, and other car manufacturers mitigating the innovation and competition that Tesla brings to the market.

He missed the boat.
By YashBudini on 8/9/2010 5:50:06 PM , Rating: 2
With the masses over educated and overpaid they will have to settle for the primitive. It's not like they're going to get the kinds of jobs that could afford Tesla vehicles.

But then perhaps Tesla was always meant to be nothing more than a "board of directors" car. Like an upscale Hummer, just another "fxxx yxx I got mine" automobile.

volt and leaf are
By topaz1 on 8/11/2010 9:33:46 PM , Rating: 2
so ugly! Who would want to pay that much $$ for such an eyesore? Typical GM product that has no eye appeal. And now we discover that it has the exterior size of a sedan, but the interior space of a subcompact, because of a giant battery that intrudes on the cabin?

The Model S, without question, has far superior tech, superior styling and superior functionality compared to all other EVs that are out there right now (Prius, Volt, Leaf, etc). It's battery tech will exceed the Roadster's (which, by the way, already gets 230 miles on one charge), and the Model S will push Tesla out of a niche market and into the mass market by 2013.

All the haters out there are clinging to what? GM? Nissan? Are you serious? Musk may seem too flashy, but lately he's had as much if not more success in the business world than GM (bankruptcy) or Nissan (2.4 billion in losses last year). And big losses for Tesla are EXPECTED for a company at Tesla's early stage. I would not bet against him or Tesla long-term.

There's a forest out there, folks, if you can look past the trees.

"So, I think the same thing of the music industry. They can't say that they're losing money, you know what I'm saying. They just probably don't have the same surplus that they had." -- Wu-Tang Clan founder RZA

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