Tesla to achieve leading $100/kWh battery cell cost this year, says investor after Gigafactory 1 tour

Tesla recently gave factory tours to investors and Wall Street analysts. We reported on a positive note from Baird after Fremont factory tour earlier this week and now it’s about Worm Capital’s turn, but this time it was a tour of Gigafactory 1.

The firm claims that Tesla is on track to achieve “a battery cell cost of $100 per kWh by the end of the year.”

That’s if “commodity prices remain stable”, but otherwise they came out of the tour confident that they will achieve the important price target by the end of the year.

The cost would be not only competitive but even industry-leading. In comparison, Audi says that it is buying batteries at $114 per kWh for its upcoming e-tron quattro. That’s after Volkswagen issued over $48 billion in battery supply contracts.

They wrote in a blog post about the visit:

“Big picture: After touring the facility, we feel highly confident in Tesla’s production process. Previous bottlenecks appear to have been remedied, and we’re increasingly optimistic in Tesla’s ability to hit— and sustain—weekly production rates of 6,000 Model 3 battery units per week, and with new Grohmann machine, scale to ~8,000 / week with minimal additional capital investment.”

Worm Capital also shared a bunch of high-level observations from their visit:

Electrek’s Take

I would take this with a grain of salt since those tours are controlled by Tesla’s investor relations department and there are obviously made to impress, but it’s nonetheless some interesting color on Tesla’s battery operations.

Battery cells at $100 per kWh is an important step that is believed to enable things like Tesla’s base Model 3 and Tesla Semi.

Of course, it’s also an important step toward the ultimate goal of $100 per kWh at the pack level, which Tesla aims to achieve by the end of the decade.

The comments about Grohmann Engineering helping Tesla accelerates the automation of battery production are also interesting.

We haven’t heard much about Grohmann Engineering since they delivered the latest battery module production line. Now it sounds like they will work their magic on Tesla’s other production lines.

It’s not just good news though. Base Model 3 production in “within eight months” would mean it could be somewhat toward the end of the delivery range currently advertised.

Tesla’s Model 3 design studio currently says that the “Standard Battery” is “available in 4-7 months.”

Though many naysayers say that it is not coming at all so from that standpoint, it’s good news that it is at least still in the work.


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