Musk said his new “board” battery cells, as well as changing the materials inside the cell, will allow Tesla to “cut in half” the price per kilowatt-hour, which will make electric cars approximately the same price as combustion cars.
Price per kilowatt-hour (kWh) is the most widely used unit of energy to measure the capacity of battery packs in modern electric vehicles. Those prices have been falling dramatically over the past decade, from $ 1,100 / kWh in 2010 to $ 156 / kWh in 2019, a drop of 87%.
Experts predict that the price will reach $ 100 / kWh by 2023, but Musk said Tesla It will start a three-year process to bring the price below that, although it did not say exactly what the final price would be.
Current battery packs cost between $ 10,000 and $ 12,000, depending on their capacity. Low battery prices could be the key to unlocking higher-volume, more affordable electric cars. Tesla is aiming to reduce the cost of future packages to less than $ 6,000, which would make the cost of the cell well below $ 100 / kWh.
The median price of electric cars in the US has been falling most recently, from $ 64,300 in 2018 to $ 55,600 in 2019, a decrease of 13.4%. That’s mainly due to the Tesla Model 3. But it’s still high compared to the average price of a regular gas vehicle of $ 36,600.
According to information from The Verge, the Model 3 was supposed to be Tesla’s first car for the general market, Musk’s plans were intended to build a desirable electric sports car to convince people that electric vehicles can be great, use the proceeds from that to help finance a more affordable luxury sedan, and put the funds from that effort into a car that hundreds of thousands of people could buy.
But Musk’s plan to make a Model 3 $ 35,000 never came true, and now it is back on the promise of making a low-cost electric car with a Tesla warranty.
“I think for us to get to a 25,000 car, that’s something we can do, but if we work really hard, I think maybe we can do it in about three years,” Musk said in an interview with You Tuber Marques Brownlee.