Hornsdale has certain market factors that are working in its favor, but if we saw half the savings from the hypothetical 590 MWh storage plant in my example above (noting that it would be 4.57 times larger than Hornsdale), this new battery plant would pay for itself within 3 years, earning $91.4 million a year. There is no confirmation that this technology will be in the Tesla Semi, but I’ve felt like the delay in deployment had to do with Tesla swapping battery tech. But here’s the thing, battery backup doesn’t just replace peakers. At that rate, it will pay for itself within three years. It is this number which determines the cost per kWh of storage, and today it's higher than we would like. This is the most underappreciated group.”, “But it would be difficult for me to overstate the degree to which, I think, Tesla Energy is going to be a major part of Tesla’s activity in the future.”. Consider becoming a CleanTechnica member, supporter, or ambassador — or a patron on Patreon. Tesla’s battery packs cost $156 per kWh in 2019, according to electric vehicle consulting firm Cairn Energy Research Advisors, which would put the cost of a 90-kWh pack at around $14,000. To be fair to this argument, it probably would not fill and empty every day for maximum savings. And, Tesla states: “Using Megapack, Tesla can deploy an emissions-free 250 MW, 1 GWh power plant in less than three months on a three-acre footprint — four times faster than a traditional fossil fuel power plant of that size. Some researchers estimate that price parity, or the point at which electric vehicles are equal in value to internal combustion cars, is reached when battery packs cost $100 per kilowatt hour (kWh). Tesla recently said that it aims to be at $100 per kWh by the end of last year. Does the Megapack include these new batteries? This is my conjecture on what may be afoot, especially if these prices are anywhere close to correct. Since we don’t have the capacity sizing of the portfolio (the article noted that part of it would be 400 MWh), it’s hard to make a straight-up comparison as to the pricing Tesla could get here, but if we assume that Tesla can start installing 226 MWh of capacity for every $100 million spent, this builds in an additional $9 million in profit above the highest price I’ve seen Hornsdale quoted. From 2010 to 2019, lithium-ion battery prices (when looking at the battery pack as a whole) have fallen from $1,100 per kilowatt-hour to $156/kwh—an 87% cut. Contact us here. Battery Pack Prices Cited Below $100/kWh for the First Time in 2020, While Market Average Sits at $137/kWh Opinion How Great Power Rivalry May Affect the Low-Carbon Revolution But here’s the thing — even if it the pack number is too high, if we are maintaining a similar margin for the base Cybertruck as we are on the Model 3 Standard Range Plus, it would either mean that pack costs have come down even further than my numbers are anticipating, or pack weights have come down significantly. Is this technology already in use anywhere? If my analysis is even close to right, for all of the Cybertruck’s divisive design, the reveal event could be the Trojan Horse that signaled the end of huge portions of the fossil fuel era. I don’t know if it does yet, but I strongly believe that it will, and here is where the game really changes. Megapack can also be DC-connected directly to solar, creating seamless renewable energy plants.”. Tesla is aiming to reduce the cost of future packs to less than $6,000, which would put the cell cost at well under $100/kWh. If it is able to deliver on the 56-per-cent reduction target that would bring costs down to roughly $65/kWh. Batteries boot instantly. Facebook Twitter Linkedin EMail Start a Conversation Opinions and comments published on this site may not be sanctioned by and do not necessarily represent the views of CleanTechnica, its owners, sponsors, affiliates, or subsidiaries. Tesla's battery packs cost $156 per kWh in 2019, according to electric vehicle consulting firm Cairn Energy Research Advisors, which would put the cost of a 90-kWh pack at around $14,000. This article from Greentech Media indicates that California decided to not build a 262 megawatt gas peaker plant, instead opting for a 195 MW portfolio of batteries. Using the $190 per kWh at the pack level cost that has been mentioned in the past, now imagine the Powerwall costing the same amount, but containing a 24 kWh battery in it instead. Tesla’s battery packs cost $156 per kWh in 2019, as indicated by electric vehicle counseling firm Cairn Energy Research Advisors, which would put the expense of a 90-kWh pack at around $14,000. I’ll admit I didn’t understand the significance of this at the time, but if my numbers are close to right, I sure do now. ), but I decided to keep running the math to calculate what it would mean for other Tesla products. While this is still obviously a big cost, with the base price of $150,000, it leaves over $85,000 for cab design and profits. Currently, it’s estimated Tesla’s cost per kWh hovers near the $115 mark. (adsbygoogle = window.adsbygoogle || []).push({}); Appreciate CleanTechnica’s originality? Therefore, Tesla could install about 590 MWh of storage for the same price as that peaker plant. The type of battery packs used by other automakers cost, on average, more than $200 per kWh in 2019, according to Cairn. VIDEO 2:34 02:34 Why Tesla's expected to have lowest battery costs … That, Musk stressed several times, will eliminate the existing price differential between EVs … We don’t know the size of the battery on the Tesla Semi, but we do know it goes a mile using less than two kWh of battery. The world is a much bigger market, though. It also makes this statement from Elon Musk on the Q3 2019 Tesla earnings call really stand out: “I think there is generally a lack of understanding or appreciation for the growth of Tesla Energy, as Kunal was talking about. If this is true, NextEra’s CEO, Jim Robo, would have been exactly accurate when he stated last year that “post 2020, there may never be another peaker built in the US.”. If Tesla is the clear market leader, I see no reason why it wouldn’t capture a huge segment of this market, generating nearly $1 billion per quarter from US sales alone. The 500 mile range Semi would have a battery pack around 1000 kWh, at a cost of $108,260, leaving the $200,000 model to have nearly $90,00… Is the Megapack a test bed for these batteries? Also, I don’t think Tesla hit $100/kWh cells in 2018, so I would expect the 2020 forecast to be delayed/pushed back to 2021. Shares in two battery suppliers to Tesla, ... is reached when battery packs cost $100 per kilowatt hour (kWh). Tesla's battery packs cost US$156 per kWh in 2019, according to electric vehicle consulting firm Cairn Energy Research Advisors, which would put the cost of a 90-kWh pack at around US$14,000. What happened to potentially drive costs down like this? Let’s take a look at the Hornsdale Power Reserve. For example, the firm estimates that Tesla's battery pack costs fell from $128 per kWh in 2019 to $115 per kWh in 2020. A 24 kWh battery at the same price would take me 7.42 years. Tesla Cofounder Ian Wright: How Tesla Made Cars Into Computers, Ford Mustang Mach-E Christmas Ad — Cool, Fun, Great Start (& A Tad Confusing), New Hydrogen Fuel Cell-Powered Fast Chargers Announced, Renewables = 20.4% of US Electricity Generation. How does it expect to bring capacity up to the levels needed to supply the world with gigawatts of batteries? Bloomberg New … Where I live, if I was on time-of-day-based energy charges, I would save 10 cents per kWh. Powering The EV Revolution — Battery Packs Now At $156/kWh, 13% Lower Than 2018, Finds BNEF. It stabilizes the grid at all times. Tesla's battery packs cost $156 per kWh in 2019, according to electric vehicle consulting firm Cairn Energy Research Advisors. In the long term, I expect Tesla Energy to be of the same or roughly the same size as Tesla’s automotive sector or business. According to this article from GE last year about the threat energy storage poses to peaker plants, the US will need about 20 GW of peaking power capacity to be installed over the next 10 years, with 60% being installed between 2023 and 2027. They claim that Tesla’s battery cell cost is at $111 per kWh and LG Chem is at $148 per kWh. Sign up for our free daily newsletter or weekly newsletter to never miss a story. So, how does the payoff time here look? CleanTechnica is the #1 cleantech-focused news & analysis website in the US & the world, focusing primarily on electric cars, solar energy, wind energy, & energy storage. At $108.26, we can get 226,399 kWh (or 226.4 megawatt-hours) for the same expense. by Frugal Moogal. I saved what I’m the most excited about until the end. However, the value proposition of a Powerwall is also that it backs up your house during power outages, meaning that even if the payback period is 10 years, it becomes more compelling. Have a tip for CleanTechnica, want to advertise, or want to suggest a guest for our CleanTech Talk podcast? BloombergNEF noted in a blog post that battery pack prices have fallen 89% in real terms to $137/kWh in 2020. If it turns out Tesla has figured out even lower-cost batteries than this, everything gets even better. Tesla's value drops $50 billion as Musk's promised cheaper battery 3 years away, NEW DELHI: Investors slashed $50 billion from Tesla Inc's market value on Tuesday despite CEO, Copyright © 2020 Bennett, Coleman & Co. Ltd. All rights reserved. I broke down in another article why I have a hunch that the Tesla Cybertruck is going to include a battery pack that is costing Tesla around $108/kWh at the pack level (or better! Therefore, if we assume the 300 mile range Semi has a battery pack of 600 kWh, the cost for that battery pack would be $64,956. And there are additional savings. Some researchers estimate that price parity, or the point at which electric vehicles are equal in value to internal combustion cars, is reached when battery packs cost $100 per kilowatt hour (kWh). Tesla’s battery packs cost $156 per kWh in 2019, according to electric vehicle consulting firm Cairn Energy Research Advisors. The Tesla Powerwall is currently a 13.5 kWh system and costs $6,500. If Tesla controls the market for batteries priced this low, it will be unstoppable in both the automotive and energy storage business. A current Powerwall pulling extra power in at night and using it during the day would take me 13.7 years to pay off. It isn’t too hard to see Tesla Energy generating far more revenue from this, with potentially significant margins. Let’s look at SCE, since it publishes its rates. If it turns out that pack weights have come down significantly, that just helps efficiency for its vehicle line up further. To be clear, there has been no indication from the company that there has been any breakthroughs, nor that Tesla would use this technology in these other products. (Note: this doesn’t include the installation costs.). A new report from consulting firm Cairn Energy Research Advisors (via CNBC) offers some details of Tesla’s rapidly declining battery costs. Editor’s update, digging through the archives, I found this article from June 2018: $100/kWh Tesla Battery Cells This Year, $100/kWh Tesla Battery Packs In 2020. Finally, one really important point — I’ve been challenged already on the battery costs when I was discussing this with a different person, one who looked at my numbers and said that the idea that Tesla was paying $190 at the pack level for its batteries at any recent time was far too expensive. Battery Pack Prices Fall As Market Ramps Up With Market Average At $156/kWh In 2019 That would mean California’s 262 MW gas peaker plant would have cost a minimum of $261,738,000 to construct, never mind how much more it would cost to operate. — Elon Musk (@elonmusk) November 23, 2019. It increases reliability, while smoothing out peaks and lulls in demand and production. While this is still obviously a big cost, with the base price of $150,000, it leaves over $85,000 for cab design and profits. The 500 mile range Semi would have a battery pack around 1000 kWh, at a cost of $108,260, leaving the $200,000 model to have nearly $90,000 for cab design and profits. News is published on CleanTechnica.com, while reports are published on Future-Trends.CleanTechnica.com/Reports/ and buying guides are here. Having worked in multiple industries and in roles that managed significant money, he believes that the way to convince people that the EV revolution is here is by looking at the vehicles like a business would. If you have the Performance variant — which has a range of 348 miles — it costs $15.29 for a full charge based on electricity prices of … A lot of questions remain. Therefore, if we assume the 300 mile range Semi has a battery pack of 600 kWh, the cost for that battery pack would be $64,956. We don’t know the cost of the Megapack, but we do know it contains 3000 kWh of battery backup. I have so many more questions on this now than I did, but I’m really excited to find out more. Advertise with CleanTechnica to get your company in front of millions of monthly readers. In other areas — like California, where the peak rates are significantly larger — it’s even faster. For reprint rights: Times Syndication Service, IATA calls for pre-flight Covid-19 tests for passengers, Watch out for Indian rapper Raftaar in the new ‘Bhangra Boogie Cup’ Fortnite campaign brought to you by Sony Music India in association with Epic Games, Can't guarantee no compulsory layoffs: Airbus CEO, Don’t fly in Chinese nationals, Centre informally tells airlines, Covid-19: Oxford vaccine may get nod in a few days, HC junks FIR, unites UP interfaith couple, On eve of Congress foundation day, Rahul leaves on foreign visit, PC, Chavan counter Sena bid to prop up Pawar as UPA leader, Famous Christmas foods from across the world, Party decorations for at-home celebrations, Terms of Use and Grievance Redressal Policy. It is also lighter and can attain a much higher range. We estimate that Tesla’s (NASDAQ: TSLA) battery costs have declined from $230 per kilowatt-hour (kWh) in 2016 to $127 in 2019. The Tesla battery cost about $50 million (or maybe $91 million, I’ve seen it cited as both) to construct and has 129 megawatt-hours of energy storage (or 129,000 kWh). Tesla's battery packs cost $156 per kWh in 2019, according to electric vehicle consulting firm Cairn Energy Research Advisors. I concede that, with how protective the industry is, this could be a high number. If I’m correct, this would be a really good reason for the delay. With $190 per kWh packs, the cost for just the packs for Hornsdale would have been $24,510,000. Even not assuming the benefits from the weekend, this would give the owner a payoff period under 6 years. Tesla is the only automaker currently using cylindrical battery cells - the others use pouch or prismatic cells, which meant pack-level costs of over $200 per kWh in 2019, according to Cairn. What would this mean? In that light, $100/kWh by end of 2021 sounds very reasonable. Should Tesla Spin Off Its Supercharger & Destination Charging Networks? We don’t know the size of the battery on the Tesla Semi, but we do know it goes a mile using less than two kWh of battery. On a volume-weighted average basis, battery electric vehicle pack costs are … Tags: EV batteries, Tesla, Tesla batteries, Tesla Cybertruck, Tesla Energy, Tesla Megapack, Tesla Powerwall, Tesla Semi. It can go lower as the design and technology catch up. All of the options here are outstanding, and I’m really, really excited to see what the future holds. Published on November 24th, 2019 | This means that Battery costs for Tesla vehicles likely declined from around $230 per kWh in 2016 to $127 in 2019. “Tesla simply has been engineering these packs longer than its competitors, and therefore it has a technology lead that is significant,” Sam Jaffe, Cairn’s Managing Director, told CNBC. December 4th, 2019 by Dr. Maximilian Holland. If I’m close to right, we are about to see a major shift in costs. 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