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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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By Reclaimer77 on 8/9/2010 11:00:52 AM , Rating: 0
What an idiot Musk comes off as, right? Of course Nissan could have used more advanced robust battery tech, but they weren't trying to make a hundred thousand dollar electric car!!

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.

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