Whenever there is a Tesla quarterly report - such as the recent Q2 profit of $26 million (ex-items), we get crushed by facts and figures:

  • margins
  • production
  • ZEV credits
  • outlook
  • Model X plans
  • Gen III Car plans, etc., etc., etc

Elon Musk Takes The Stage To Demonstrate Tesla's 90 Second Battery Swap Earlier This Year

Elon Musk Takes The Stage To Demonstrate Tesla's 90 Second Battery Swap Earlier This Year

...and if you are into that sort of thing, Tesla CEO Elon Musk discussed a lot of those topics during a Q & A with analysts (which you can find here)

Which means we have been so busy with Tesla numbers that we almost missed a test drive of the car by the MIT Technology Review that had some really interesting info.

Actually, we did miss it - but our good friend and reader Rob didn't.  He also noticed a comment from Tesla’s chief technology officer, JB Straubel that gave us an answer to a subject that was not well known.

Specifically, what the heck is the cost of the batteries found inside the Tesla Model S?  And can they really afford to use this small format technology to power a $35,000, 200 mile car sometime around 2018?  The answer is - apparently they can.

By most estimates, the battery for the Model S that I drove should cost between $42,500 and $55,250, or half the cost of the car. But (Tesla Tech Officer) Straubel indicated that it is already much lower. “They’re way less than half, actually,” he says. “Less than a quarter in most cases.”

Straubel says more can be done to lower batter costs. He’s working with cell and materials suppliers to increase energy density more, and he’s changing the shape of the cells in ways that make manufacturing them easier.

Tesla Model S Batteries Not So Expensive After All

Tesla Model S Batteries Not So Expensive After All

As a point of reference, the Model S lineup (non signature) ranges from $71,000 for the entry level 60 kWh car to $81,000 for the standard 85 kWh version and another $10,000 for the P85 (85 kWh Performance Edition).

Using the "most cases" reference from JB Straubel, that would most likely mean that the standard 85 kW version Model S would be a safe bet to have battery costs at "less than a quarter" - that translates to a total maximum cost of about $20,250 or $238/kWh.  Pretty cheap.

So how much would it cost to power a smaller, 200 mile entry level EV from Tesla?  We estimate it could be achieved from around 50kWh seeing how the 60 kWh version of the Model S is rated at 208 miles by the EPA. The third generation Tesla will be a much smaller, lighter and we assume more aerodynamic proposition.

50 kWh of lithium power would only translate to a maximum of $11,900 in costs...still plenty of room to still build out the rest of the car.

MIT Technology Review - hat tip to Rob