Tesla confirms base Model 3 will have less than 60 kWh battery pack option, cost is below $190/kWh and falling

tesla battery cells

Tesla doesn’t like to talk about its battery cost as it complicates an already complex supply chain with several suppliers, including long-time partner Panasonic, and new ones like LG and Samsung. But the company felt the need to comment this week following a new analysis of the Model 3’s cost by Jon Bereisa, CEO of Auto Lectrification and former chief engineer of the Chevy Volt program.

Colin Langan, a UBS analyst covering Tesla for the firm, hosted a call with Bereisa to gain some insights for its financial model of the company.

In a new note (via StreetInsider), Langan writes that Bereisa’s Model 3 estimate cost breakdown adds up to the vehicle being unprofitable for Tesla. He estimates the Model 3’s factory variable cost (FVC) to be $1,510 above its $35,000 starting price, while he sees the Chevy Bolt’s FVC at $4,980 below its $37,500 starting price.

Bereisa based his analysis on the base Model 3 being offered with a 60 kWh battery, like the Bolt, and on Tesla achieving a cost of ~$190/kWh. He estimates that Tesla’s current battery pack cost (cells, casing, cooling and entire pack) is at $260/kWh, while GM’s is at $215/kWh. GM’s cells and battery pack are manufactured by its partner LG Chem.

It’s interesting to note that Bereisa worked at GM for decades and he was one of the top engineers working on electric vehicles at the automaker ever since the EV1 program.

Tesla’s Vice-President of Investor Relations, Jeff Evanson, jumped in on the call between Langan and Bereisa to correct their analysis. Evanson stated that Tesla’s battery pack cost is already below $190/kWh – meaning at least 26% less than Bereisa’s current estimate – and that the base Model 3 will be offered with a battery pack option smaller than 60 kWh, like Bereisa assumed.

We reached out to Tesla for a transcript of what Evanson said exactly and we will update if the company gets back to us.

tesla battery tear downTesla officially discontinues the Model S’ 85 KWh battery pack

During the Model 3 unveiling last month, Tesla CEO Elon Musk said that the base Model 3, which is expected to start at $35,000 before incentives, will have a range of over 215 miles on a single charge. While Musk didn’t confirm the energy capacity of the pack, it will be impressive if Tesla can achieve such a range on a less than 60 kWh pack, like Evanson is now suggesting.

During the call, Evanson also said that the Model 3 will be partially made of aluminum, something Tesla officials said in the past. While the car’s chassis should end up heavier on volume than the all-aluminum Model S, the Model 3 is about 20% smaller than its older brother, which should compensate and help achieve a 215+ miles range on a less than 60 kWh pack.

The Model S was originally offered with a 60 kWh battery option which has since been discontinued. The version of the all-electric sedan was advertised with a 208 miles range but is much heavier/bigger than the Model 3.

As a comparison, the similar sized Nissan Leaf now has a 30kWh battery pack option with an EPA rating of 107 miles (116 City/95 Highway miles).

FTC: We use income earning auto affiliate links. More.

Stay up to date with the latest content by subscribing to Electrek on Google News. You’re reading Electrek— experts who break news about Tesla, electric vehicles, and green energy, day after day. Be sure to check out our homepage for all the latest news, and follow Electrek on Twitter, Facebook, and LinkedIn to stay in the loop. Don’t know where to start? Check out our YouTube channel for the latest reviews.

Comments

  1. in Musk we trust - 7 years ago

    I don’t think 215 miles is possible with less than 60kWh

    • vortexz171 - 7 years ago

      why ? Leaf can do 107 miles with 30 kw (meaning it would do 214 miles with 60kw). If the model 3 will have better efficiency than the leaf, there you go, less than 60 kwh required

      • Frank - 7 years ago

        Would be easy with similar performance but the cheapest Model 3 will do 0-60mph in less than 6 seconds, is it still possible to put a 50kw battery in the car?

      • Joel - 7 years ago

        It’s not a linear relationship. Larger battery weighs more and takes more energy to move.

      • Stetson - 7 years ago

        A faster 0-60 time doesn’t mean less range from the pack, it just means that the pack can deliver enough energy to the motors.

        You can have a quick-accelerating car that goes a long ways on a tank of gas. It won’t if you’re always flooring it, but that’s not how they calculate the EPA range for normal driving conditions.

      • Andrew N. Price - 7 years ago

        Also bear in mind that the Leaf has a passively air cooled battery pack compared to (I assume) Tesla’s batteries which use an active liquid cooling system. This is a bit of a conundrum for me. Using active cooling adds weight and increases cost. Yes they can design the whole car around it to save some weight, but I kind of agree with Bereisa here: I don’t see how they can hit that pricepoint given the other cars we are seeing at that level. I mean the guys at Tesla don’t really know if they can or not at this point since the car is not finished, and they have not even started production on the batteries for the vehicles; which is something of an issue since they are reportedly also searching for lithium suppliers to meet the demand. If the price of lithium goes up because they need so much of it: then no, they can’t hit that pricepoint and make a profit. Regardless, I think it is fair to say that even if they do hit the 35k mark, they will not be generating much in terms of revenue on base vehicles.

      • iDontDoWindows - 7 years ago

        They will make exactly 35k revenue on a base model care 🙂

    • Al S - 7 years ago

      215 miles will be very easy with a 55 kWh pack. The Model 3 is much more aerodynamic than the Bolt.

      • Victor R - 7 years ago

        How do you know how aerodynamic either car is?

      • miburnsblog - 7 years ago

        Are you blind just look at them

      • miburnsblog - 7 years ago

        The Model 3 is expected to have a drag coefficient of 2.0 or lower the Bolt is 3.1.

      • Al S - 7 years ago

        @Victor : The Model S has a drag coefficient of 0.24 (verified by Car and Driver in a wind tunnel). Elon said it will hopefully be 0.21 for the Model 3. GM has said 0.31 for the Bolt. Of course, the coefficient of drag is only half the equation. The Model S actrually has less frontal area exposed to drag than the Bolt (as computed by Car and Driver with a program that processes images) and of course the Model 3 will have even less of a footprint.

    • Mike - 7 years ago

      EM has stated he hopes the coefficient for the M3 will be .21 or less. With a coefficient that low, a smaller orthographic projection, and lighter weight than than the MS, along with efficiency improvements in the power electronics — you could easily get 215 with a 55 or 50 kwh battery.

    • Randall - 7 years ago

      The larger Model S 60 kWh was EPA rated 208 miles.

  2. atbulgar - 7 years ago

    I said it before that tha base version will be with 55kWh

    • Drucifer - 7 years ago

      I said the same thing. 55 kWh standard. If they got the Model S to 206 on 60, the smaller car, with a coeff. of drag at0 aprox 0.21 +/- should be able to do 215 on 55 kWh.

  3. John - 7 years ago

    I still think a 100kwh battery pack will be the minimum to replace single car homes. Aggressive driving, plus most highway speed limits are 70mph. And in the winter/summer, you’re going to use the heater/ac.

    • Mohseni - 7 years ago

      You may be right. And people who buy gas guzzlers do pay through their nose. On the other hand, there may be an issue of weight and volume for 100 kWh, and a small car like the T3 may not be the right platform.

    • Nster - 7 years ago

      I don’t think so. You just need more fast chargers for those road trips. Most people in cities don’t do more than 215 miles per day. Many families have a second car too. Today, most families would be great with an electric with a plug in hybrid as a secondary.

  4. Taylor Marks - 7 years ago

    My guess from about a month ago (just before the Model 3 unveil) was that Tesla’s base Model 3 would be 50 kWh, with an option to upgrade to 75 kWh, while the Model S and X would both have a base of 75 kWh with upgrades to 100 kWh available.

    I’m expecting that Tesla will make an announcement about 100 kWh being available for Model S and X sometime before the end of May. They’ll continue offering 90 kWh packs until those run out in a few months (or weeks or days – not sure how many Tesla keeps on hand). The Model S 70D will be similarly discontinued and replaced with the 75D before long. Maybe they’ll offer 70 as a downgrade for a few months, much like they currently offer RWD as a downgrade from AWD (which they arguably make standard – when you enter the design studio, it has AWD checked off by default. No other upgrade is handled that way.)

    • Danno - 7 years ago

      They want the money from AWD. It’s not needed and adds 5g to the cost, maybe 4g to the M3.. I’d take a battery upgrade and autopilot before taking AWD so hopefully it remains an option. Yes I live where it snows alot. Still don’t need AWD even though it’s nice..

      • Josh - 7 years ago

        That depends on where you live. Where I am we get a lot of snow in the winter, and AWD is very useful, if not essential.

    • Jack - 7 years ago

      an upgrade up to 75kWh would hit the sales of the S right on the nose.

    • Bul_gar - 7 years ago

      Tesla said that M3 will like Audi A4. The new A4 is 5-6% smaller. The between the rear wheels and rear end of M3 is less than on Model S. Tesla will use more of the length on M3 for the battery. M3 will be taller than Model S because will use and taller battery sales. On same area the taller cells will have more energy. If Tesla release 100kWh battery for Model S&X this year I’ll expect M3 biggest version to go above 80kWh and even reach 90kWh. Of course everything depends from the projected weight of M3. My English isn’t perfect.

  5. md - 7 years ago

    Protip: if you did the math in how many cars they want to build and how many kwh of batteries the gigafactory is planning to put out in 2020, 2 years ago you would already have the answer of 50.

  6. Anthony - 7 years ago

    215 Miles should be easy to do with a 55kWh pack. It also makes it easier for them to offer two levels of upcharging (65, 75kWh). Apple does this with their product segmentation all the time, if the company offers 3 options (good, better, best), people gravitate towards the middle (better). An easy way of getting an extra $4,000 out of people.

    Tesla cant go too small though, the issue with the smaller packs is the slower supercharing rates (if the cells in a 55kWh pack max out at 2C recharge, they could only accept 110kW of power into them, less than the 135kW SC standard).

  7. Rio (@Crzy_rio) - 7 years ago

    $190/kwh is insane!!!!!!

    Before Tesla, we were expected to reach $250-$300 by 2020. Now thanks to Tesla we have passed it by 4 years.

    • JayTee - 7 years ago

      According to the analyst in the story, thanks to Tesla and GM.

      • Mohseni - 7 years ago

        GM? Lol. Volt was supplied by LG. GM’s contribution to EVs ended with EV1.

  8. Illuminati - 7 years ago

    Battery pack for the model 3: ~$155/kWh
    Pack size for 215 mile range: ~50 kWh
    Pack price: 155 x 50 = ~$7,750

    The battery pack represents ~22% of the Model 3 selling price.

  9. ela - 7 years ago

    jeff responded on the call on the numbers presented. it could be significantly lower, but below $190 at this stage in its evolution is phenomenal and is a harbinger for other areas in the organization as a whole. it shows how well costs and efficiencies are managed at tesla. They are well on their way to building a sustainable platform for the long term growth they have repeatedly said their focus is on. insofar as battery sizes for M3, 215 projected mileage was the bare minimum estimate put forth by musk at the unveil based on what could be achieved at that time. I think they’re aiming for a minimum 250 mile range for the base model. I might add a likelihood of another battery capacity upgrade beyond the inevitable 100kWh for S&X by the time M3 production gets underway. they’ll be reaping dividends on cell and pack capacity from the Dahn collabo by then. GF will be growing nicely on Powerpack/wall demand – that’ll be the true driver on lowering cost. all comes together nicely.

    • Jack - 7 years ago

      so far the price of the battery pack is going down for at least a year but the Model S is still costing more and more.They should sell a 70D base Model S with a smaller price and forget about the extra”for free” that they gave in the latest model.

  10. Illuminati - 7 years ago

    50 kWh is enough.

    The Model S 60 has a EPA-rated 208-mile range with a 60 kWh battery pack.
    The Model 3 will weigh ~20% less than the Model S: 60 kWh x 80% = 48 kWh.

    Add the fact that Model 3 will have a new battery chemistry, and a new motor technology, as well as better aerodynamics, and we can conclude that a 50 kWh battery pack is more than enough to get a range of 210 miles.

    • Andrew N. Price - 7 years ago

      They are using steel in the model 3, yes it is smaller but it will also be heavier. Also they have not even finished the car yet, or started producing batteries. They are still seeking lithium providers to meet their needs. Tesla can’t really say with any authority whether they can make a profit on cars at that price point now or not.

  11. atbulgar - 7 years ago

    It’s pointless for Tesla to sale M3 60kWh cheaper than Bolt EV. That’s why 35k M3 will be with 50-55kWh and 60kWh version will be $37500.

    • Bubba2000 - 7 years ago

      I suspect that ASP of M3 will be around $50k+k, at least initially. Folks will get the biggest battery, AWD, autopilot, performance, etc. Tesla will be busy selling those cars for a while. Meanwhile, battery prices will continue falling along with electronics.

      BEV will grow like S-Curve. Exponential growth just getting started. Look at M3 reservations.

      • Jack - 7 years ago

        I don’t know if a fully-loaded M3 buyer from NY would receive his one before a base M3 whitout any extra from California?

    • Randall - 7 years ago

      It’s pointless for SpaceX to sell launches 50% cheaper than the competition. Bit they do.

  12. Keith - 7 years ago

    What will it do to range with the expected cell upgrades going into the Model 3. Tesla have already said new cells would be 20% bigger. So there has been talk of going from 18650 to 20720 – 20750.

    • Mohseni - 7 years ago

      Its time for them and others to go to larger cells while keeping the same e.density. It is mind boggling why the Japanese/Koreans dont do that. Current 26650s are useless because the e.density drops considerably.

      Yields should not be very different from 18650 to 26650. But why does the density drop so badly?

    • Mohseni - 7 years ago

      20720 and 20750 are about 40% more volume. So why would the energy go up only 20%?

  13. James - 7 years ago

    Smaller packs make sense for a second car. I don’t need to lug around 80KW of batteries when 40kW will do. Our RAV4EV has a near-perfect urban range of 120-130 miles. If it had quick charging it would even be good for 200 mile trips. I wish Tesla would build more battery switching stations where you could rent a big battery for trips but keep a smaller one for the other 90% of driving. Such a waste of resources to be hauling around so much wasted battery all the time.

    • Pluto - 7 years ago

      About 1 year ago, Tesla dropped battery pack swapping altogether because customers weren’t using it.

  14. Nima Chalebyani - 7 years ago

    This is good news. It means the car needs less then 60 KwH to get 215+ Miles of reach which means 1. Filling the battery up will go much faster if you compare it to 85 KwH model S(same reach). It will also make running costs much cheaper. But I was already expecting this since the base model S 70 KwH gives 234 miles so a 60 Kwh model S would give 234/ 70 X 60 = around 200 miles ETA Having the same kind of battery in a smaller car which weights less would give it much more reach and that’s just the rear wheel drive. Having an 90D would probably give it 344 ETA (in case a 55 KwH rear wheel drive would give it 215+ miles)

    • Nima Chalebyani - 7 years ago

      I meant to say 70 not 85 of course!

    • Trey - 7 years ago

      “Filling the battery up will go much faster if you compare it to 85 KwH model S” No, (on superchargers and other very fast chargers) it won’t. The battery charge speed is limited by how quickly the cells can charge, not the amount of power available. This means that a 50 kWh and 85 kWh of the same type and revision would charge to the same percentage in the same amount of time, and in number of miles per unit of time, the larger pack would be much quicker. KmanAuto did a test that shows this, here is the link to his video to show evidence https://www.youtube.com/watch?v=OPD9Sg8slqE

  15. Swiv - 7 years ago

    If the initial estimate was based on Tesla’s apparent $260/kWh and a 60kWh battery, that marks the base cost estimate at $20,910 without the battery. Tesla claiming their battery cost is down to $190/kWh, and assuming that he lied and the base DOES come with a 60kWh battery, that would put the overall cost at $32,310 and profit them at least $2690 per unit.

    Now say it comes with a 50kWa battery, that would put it at $30,410 and profit before incentives at $4,590. The same may be true as a generally educated guess if they put a 55kWa battery and a lower cost per kWa.

    • Jack - 7 years ago

      and don’t forget that EM predict that on average buyers will put 7K of extra and there is the real markup

  16. Jack - 7 years ago

    Why the price of the MS is going up if the cost of the battery is going down?

  17. George s - 7 years ago

    All this is speculation, tesla doesnt have the money to even start building the model 3, they are burning cash and built less cars first quarter than last year. They will be broke soon without a cash infusion, why do you thing the model 3 deposits, he now has another 400 million of other people money. Give it 6 months and there will be more stock offering/borrowing you cant burn millions of dollars a day forever, sooner or later you have to make money.

    • rustybeancake - 7 years ago

      Amazon took many years to turn a profit, not because people didn’t want what they were selling, but because they invested heavily in growth. Tesla are doing the same. They could stop growing right now and turn a profit very comfortably on Models S and X, but they have grander ambitions. This is why their share price is so high. As long as people remain confident they can achieve their goals (i.e. Model 3 development and rollout goes reasonably smoothly), people will be content with Tesla not turning a large profit.

    • Jack - 7 years ago

      They just can’t take any of that 400million…

  18. ela - 7 years ago

    seems lost on some folks here that steel is the most heavily developed and varied metal to exploit for heavy industry. a lot of those recent developments have been focused on lighter, thinner and more ductile guages that transcend the arguments on a car primarily built with it will necessarily be heavier than some anticipate.

    indeed, many other car manufacturers have been at this for years already, producing even smaller more affordable cars with ever lighter structures while making them larger (safer) than previous generations primarily on the back of such advancements. as pes usual, expect tesla’s ongoing finite element analysis kaizen on steroids – the car is always a minimum viable product – approach of implementing any and every kind of improvement (not merely just software updates), that’s customer word of mouth on another level to anything the Model S has achieved so far.

    add recent apple poach charlie kuehmann and his materials chops to the mix, and 3 becomes an exciting prospect for some materials innovation – to say nothing of all subsequent products at tesla (even the eagerly anticipated snakebot charger…) and also at spacex.

    the often lamented quality finishes on interior appointments will also be a stronger focus going forward cos you can’t compete with an a4, 3-series or C-class if you don’t at least match it there – that kind of snobbery counts for a lot in that segment and, judging from early X customers raves on that front and recent S improvements as well, they’re well on their way.

    • Jeff - 7 years ago

      Well said. And agree with your observation on fea on steroids. Do have any idea what fea package they use? My son is looking to study mech engineering next year.

      • ela - 7 years ago

        @Jeff you can verify this with @FredLambert here or on twitter, i think they use Dassault Systems software. you can check them out at http://www.3ds.com

  19. rennieallen - 7 years ago

    The Bolt will have a 60kWh battery, and GM announced their cost is $154 / kWh. That means at the stated price for the Bolt GM has a nice margin and can afford to discount as the release of the model 3 approahes. (which they’ll need to do, since after 6 months of beimg the exclusive affordable 200+ mile EV their credits will be exhausted).

    • JayTee - 7 years ago

      Sounds like they’ll be exclusive for about a year.

    • Mohseni - 7 years ago

      Not really. GM’s $154 /kWh is for the batteries only while Tesla’s $190 is for the assembled pack. So they are about the same.

  20. Joakim Ekelöf - 7 years ago

    Who say it’s 50, 55 or 60? If Elon wants, the basemodel can have 58.5kwh, to meet whats stated about miles and price.
    And the 3 steps of sellingpoints, is well known, Basic, Medium and Super. They will sell most of the medium, end they will have the most profit in % on that.

    • Mohseni - 7 years ago

      The 70 kWh will have the most profit. There should also be a cheaper 48 kWh T3 that is $3,000 cheaper with range 175 mi.

  21. Mohseni - 7 years ago

    This is important news that the T3 uses passive air cooling. Has this been confirmed?

  22. Mohseni - 7 years ago

    215 miles range is more than the minimum needed for 60% of buyers. I think I could live with 175 miles range. So a 48 kWh battery would be perfect, and the T3 would be about $22,500 after rebate about $2,500 less. Tesla, please offer 3 battery sizes: 48 kWh, 60 kWh, 75 kWh.

  23. Tesla70D Owner - 7 years ago

    Why is nobody talking about the fact that the rated miles on the Tesla vehicles dont actually match up to realistic driving miles? ex 70D rated for 240 but realistically only attains about 170 (if your lucky?)… has the sheet been pulled over everyone’s eyes? I feel like the only reason why current Tesla owners keep saying they would re-buy another one is because they A aren’t being honest and B want others to suffer the same mistake as they did. Ridiculous… also the Superchargers… completely variable charging times… Again nobody speaks on this…

    • Seth Weintraub - 7 years ago

      I have an S60 and can usually expect to get the rated mileage unless it is cold, or I’m driving super fast or stop and go on curved streets. But the same is true of my prius. I don’t get 50mpg when I take it skiing, nor do I expect to.

      As for the superchargers, the only time I’ve gotten substandard charging times is when they are almost full. Some are faster than others but usually they are very quick

    • Mohseni - 7 years ago

      If the 240 miles was put out by the EPA, then it is pretty accurate. You are either driving > 70 mph most of the time, or you are turning your heat on at highest. Would you rev up a gas engine in a dead cold to 6,000 RPM upon start? You would not. Same here, you can’t maximize the use of heating or drive at very high speeds.

  24. David Grove - 7 years ago

    Tesla batteries will continue to improve power capacity with a smaller size and weight. Many researchers are working on this problem now.
    The US needs to move away from wasteful military spending and direct it to renewable energy technologies.

Author

Avatar for Fred Lambert Fred Lambert

Fred is the Editor in Chief and Main Writer at Electrek.

You can send tips on Twitter (DMs open) or via email: fred@9to5mac.com

Through Zalkon.com, you can check out Fred’s portfolio and get monthly green stock investment ideas.