If Tesla wants to build a cheaper, more affordable EV, it’s going to need to invest in better battery technology.
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Tesla wants to make lower cost electric vehicles, as a key part of its plan to fend off challenger.
But it needs to invest in low-cost, cutting-edge battery tech to see that vision through.
A mineral research firm says Tesla is not doing enough to control the costs of its batteries.
Elon Musk’s ambition to sell 20 million Tesla vehicles per year by the end of the decade is no joke. So it was strange that its long-awaited plans for a low-cost electric vehicle was a complete no-show during the launch of Tesla’s latest master plan in Texas last week.
A cheaper Tesla would be a surefire way of enticing a new crop of would-be customers. Instead, Tesla’s CFO said at the event that it would focus on Silicon Valley’s very much en vogue trend of “efficiency” to come up with the $175 billion that it needs to make the necessary investments to hit its 20-million-cars-per-year target.
Musk himself teased at a Morgan Stanley conference this week that there’s a “clear path” to “a smaller vehicle that is half the production cost of the Model 3,” Tesla’s cheapest vehicle with a starting price at around $43,000.
Still, given Tesla’s delivery of roughly 1.3 million vehicles last year, it clearly has a long way to go to hit Musk’s goal. Where exactly should it start if it wants to get more efficient? Perhaps with the most expensive EV component of all: batteries.
“To truly build a sustainable low-cost EV, a number of cost controls need to be implemented across the supply chain,” said Benchmark Mineral Intelligence CEO Simon Moores. “None more so than batteries and this wasn’t showcased enough by Tesla at Investor Day.”
Batteries, the rechargeable workhorses of EVs that quite literally power the whole thing, depend on a critical mix of metals, with perhaps none more critical than lithium. The trouble is, record high lithium prices and a sprawling supply chain that stretches back to China has made battery cost controls a headache for Tesla.
If Musk is serious about delivering EVs that everyone can afford, he’ll need to get serious on bringing the costs of batteries down. Failure to do so risks ceding the market to hungry competitors. But if it can pull it off, Tesla has a clear path to …read more
Source:: Business Insider