Elon Musk Foresees Major Drop in Battery Prices

Today I heard a panel presentation at the California Public Utilities Commission (PUC) with Elon Musk, CEO of Tesla, and Lyndon Rive, Elon’s cousin and CEO of SolarCity.  I deal with a lot of climate-friendly businesses in my line of work, but Elon Musk is the one business leader with products (electric vehicles and batteries) that actually have the capability of saving the world.  Electric vehicles mean two things for fighting climate change: 1) they represent a switch from transportation fossil fuels to electricity and 2) they offer an investment in battery technology that could enable 100% clean, renewable electricity (for when the sun isn’t shining and the wind isn’t blowing).  Global climate change solved!image

So I was keen to hear Mr. Musk’s take on battery research and the future of EVs.  Some highlights from the panel discussion, which also included PUC President Micheal Peevey:

  • Musk noted that the raw material cost of batteries is about $60-$70 per kilowatt hour, and he believes his new battery “gigafactory” can get the price down to near that level.  Right now batteries are about $400 per kilowatt hour, which for a 24 kilowatt Nissan LEAF means the battery alone costs $9,600.  Bringing it down to $100/kwh means shaving $7,200 off the cost of the LEAF.  Or perhaps more importantly, for the same cost you could get a 96 kilowatt battery in a LEAF, enabling a range of over 300 miles per charge.  That’s a game-changer for EV adoption.
  • Lyndon Rive complained that solar PV customers who have a battery pack for nighttime or backup energy are currently having to wait up to 8 months for the utility to connect the system.  To which Musk commented in disbelief, “that’s crazy.”  I guess utilities have no incentive to hasten their inevitable demise, but this needs to change.
  • Musk envisions home battery packs to go with rooftop solar that would be maybe three inches thick and attach to a garage wall.  Otherwise, he said, “they can’t take up the guest room.”

Overall, Musk and Rive noted that EVs and rooftop solar still represent a tiny fraction for consumers, with rooftop solar outpaced by new home construction nationwide and EVs less than .1% of new car sales right now.  We have a long way to go, but it’s good to know we have dedicated business people working to solve these problems and export California technologies and innovation around the world.


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