Elon Musk announced at a shareholders’ meeting that he expects Tesla to be able to break the $100 per kWh barrier for car batteries this year. The price of batteries for electric cars has been falling for years.
According to Musk, in order to achieve the limit of 100 dollars per kWh for the complete battery, it is necessary that improvements are made in the chemical processes in battery cells. Also, there must be more vertical integration in the large battery factories of Tesla to make the production process more efficient, Ars Technica writes based on statements by Musk. Assuming a 50kWh battery pack and a retail price of $35,000 for the Model 3, the batteries at the $100 per kWh mark would represent approximately 14 percent of the retail price.
At the end of 2017, the average price for a lithium-ion battery pack was still $209 per kWh, according to Bloomberg; that was a price drop of 24 percent compared to a year earlier. A Bloomberg New Energy Finance analyst estimated at the end of last year that the $100 per kilowatt-hour barrier will not be broken until 2025.
Musk also briefly addressed questions about improving the energy density in the batteries. According to the Tesla CEO, it is difficult to have a battery generate twice as much power for the same weight, but he sees a 30 percent improvement in energy density in the next three years. Musk says he has confidence in the technology required for this. It just needs to be scaled up and become more reliable.
During the meeting, Musk also briefly discussed the financial problems surrounding the difficulties with the production of the Model 3. He admitted that many mistakes were made on the Model 3 production line. However, according to the director, things are going in the right direction, partly because every part of the Model 3 production process has now shown that it can reach 3,500 cars per week. On that basis, Musk states that Tesla will be profitable from the third quarter of this year and that there will be positive cash flow in the fourth quarter.
Musk also promised that another update to the Autopilot will be released this week, which will bring “significant improvements.” It is not yet clear exactly what improvements are in the pipeline. According to the Electrek website, an update is being tested with a number of incremental improvements to Autosteer and TACC. Also, according to Musk, an improvement will be made in the next few months that will make the system better able to assist with exits from the highway.