This is why Tesla is valued higher than GM, Daimler or pretty much any other car company. Tesla at it's heart is a battery company with products built around that. From what I've read, from 2025 onwards traditional internal combustion engines will not be able to compete on price with electric cars.
Something similar will likely happen to energy storage, though this is of course still a relatively novel industry that has been spurred on by renewable energy's intermittent availability. Interesting times..
Edit: percentage of annual battery price drop after doing some googling
It was Samsung, not Tesla, who supplied the actual cells : Tesla’s giant new Powerpack project in Australia will use battery cells made by Samsung
Someone else owning your key competitive advantage sounds like a vulnerability...
OTOH you could similarly say the touchscreen was the key to the first iphone... invented, developed, manufactured and owned by someone else.
LG, Panasonic and Samsung make almost all the lithium ion cells used today so it doesn't seem odd that Tesla would license one of their technologies to start. The r&d savings would be in the billions.
Not sure whether Panasonic does it for them but the way I hear them talk about it they seem to have quite a bit of R&D in house.
Musk has repeatedly mentioned how aware of this he is. That explains his insistence on building the Gigafactory.
> “Musk has been the visionary,” said Steve LeVine, a journalist at Axios who has written a book about the battery industry. “He has been willing to take the plunge all the way along, from the very beginning.” In contrast, he told me in a phone interview, “Detroit has approached this race so cautiously.”
I remember hearing Musk being quite adamant the scale of the factory was for batteries, but you have to understand, he can’t really publicly say that he’s leveraging Panasonic for now, but will drop them as soon as he can.
After all, they are by far the world's largest consumer of batteries. They have leverage.
Hell, back in the 40's even Thomas Watson of IBM claimed there was only enough market for 5 computers in the world.
Many times it is a different style of how standard business operates so someone coming in and changing the market is really hard to look at when your mind is already made up.
If you bring your lipo cell from 80 to 60% and back slowly you can get an order of magnitude more cycles. This lends itself well to solar storage scenarios where you want to level out the production and can plan around how and when it will charge and discharge.
ie by being a fast peaker supply, it stopped spikes in energy prices across the Aust Energy market which is where the savings of $40M come from.
Not that there is anything wrong with that - it still makes total sense for SA to deploy such a system in that case, but it's very different than say saving $40 million in fuel costs due to not spinning up short-term natgas generators or something.
This is direct state interference in a competitive market so the “floor” is still quite high. With more private operators entering the market the ability to game the system will be eroded further since everyone wants to get the easy money.
The savings were mostly due to cutting the fat out of the market gouging practices. No/little change to actual supply occurred.
Socialism would be hitting those guys with a big regulatory stick, or shutting them down for just providing a service. Not all state expenditure is socialist. Were monarchies involving heavy state domination of the economy socialist? No, and neither necessarily are liberal democracies with a state sector, especially if that state sector is exposed to market forces.
It's really annoying that so many mentions of socialism or capitalism on HN get the basics wrong. These terms have perfectly good established meanings that are actually quite specific.
So: Australia is sunny and it's consumption peaks generally follow the temperature due to air conditioning - so build more solar and pair it with more storage (batteries) instead of investing in coal and gas burning.
Thats is such a bizarre comment. No corporation has a right to make money, they have to earn it by providing a valuable service. If that service can be provided more efficiently another way, tough. That's what market forces are all about.
Yes the energy company commissioning the battery is publicly owned. You could squint and see some socialism in that. I've no argument there. However it's doing this because it is exposed to market forces, and overspending on peak power provision. Characterising responding to that market stimulus with capital investment is I think going a step too far.
Look at it another way. Is exposing public companies to market forces and having them react to those stimuli more socialist than protecting them from markets, or less socialist? Is it closer to pure capitalism or further away?
The problems have been interconnects failing, poorly maintained transmission lines failing, the market operator placing restrictions on renewables which meant that renewables were not allowed to try to keep the lights on, and reliance of SA on electricity imported from unreliable interstate supply (aka coal thermal plants that break down or simply fail due to high ambient temperatures).
All of SA’s energy problems are due to poor regulation, poor market operation, poor maintenance, Federal interference, market gaming by fossil fuel operators, and unreliable coal plants.
There will be similar returns possible for other batteries in NSW (a net importer, thus highly vulnerable to gaming of the market) and QLD with a large installed base of unreliable coal which means increasing need for ancillary services.
Coal is not reliable to start with, and the plant currently in use is old and getting to the point of being no longer economically viable. NSW and QLD grids will need significant support services as they transition from unreliable coal to dependable (but intermittent) renewables.
While the transition to renewables has indeed been rapid and jarring, that's not what has caused problems.
Failure of a meshed power system cannot be attributed to the failure of any single sub-system. Rather it must be a combination of factors including those you just mentioned.
The dependence of the power system on renewables (specifically wind farms)contributed in two ways to the blackout:
1. The majority of wind turbines provide little or no system inertia. By displacing synchronous generation with wind generation, system inertia is reduced which results in greater ROCOF during an event where there is a change in active power demand/supply. In the SA blackout, fast ROCOF overwhelmed the system's last line of defence- under frequency load shedding.
2. Some wind turbines contained a fault ride-through setting which AEMO was apparently not aware of prior to the blackout. Specifically, the setting caused the turbines to disconnect after experiencing a sequence of voltage excursions within a set time period. The disconnection caused a loss of active power supply to the grid which contributed to the drop in frequency and eventual collapse.
More peaks doesn't mean worse all things considered, it isn't a critique, it's just saying that battery viability is highly contingent on local power mix.
I don’t know what this system was designed for, but a product that costs $66M and saves $40M in its first year need not be designed for a long lifespan.
It seems scrapping this after 3 years still would net you a nice profit margin.
So, depending on how much designing for a long lifespan costs, that may be a thing of the past.
As opposed to say a synchronous converter which requires annual downtime and continual replacement of parts, and (being limited by inertia) can’t provide the same stability and support that a battery can.
On top of that these systems are still useful well below their original capacity, so they can rather than a sudden huge bill you simply add more capacity as the original battery’s degrade in a fairly predictable fashion. Over time you end up with a much smaller annual investment than your saving every year.
The li-ion externalities is mostly incurred once when mining. Although it's still in it's infancy, recycling li-ion batteries is already possible, and supposedly profitable. Especially when you can get an enormous batch of cells of exactly the same model as you would with this project.
The biggest problem in recycling li-ion batteries is that you may need different processes for different cells, so you need to sort them first.
I agree with your comment, but lithium is not mined. This is a common misconception and should be noted since we're chatting about externalities.
You are adopting implied reductionism around the "cost" side without having done the work (in my opinion) to justify that this concern outweighs the upside benefits of ceasing to use coal.
PS a lot of the minable lithium which isn't in Chile, is in Australia. So, we have low-miles lithium!
Presumably that is why the same company is trying to kick off in Australia as well, even though we have higher regulatory and labour costs here.
Human ingenuity not going to stop finding extractible sources anytime soon.
Sure, extracting copper has costs too, but I don't see the same handwringing about that.
There are of course a variety of good reasons why exponential cost reduction won't continue, such as the cost of raw materials, shipping, and so on - but most importantly that almost nothing works like that for long.
Li-ion battery manufacturing has seen a good uptick in efficiency due to quickly growing demand and a lot of money poured into squeezing out efficiencies, but there is no reason to assume exponential cost reductions to continue indefinitely. Indeed, it does't work that way for nearly any other industrial product, and (current) batteries aren't special in any way that would make them obviously different.
> Similar to what Moore's law did to semiconductors ...
Actually it is not similar at all. Semiconductors were actually special. There was an exponential reduction in feature size for many years, which led to exponential increases in performance, power efficiency, etc, per dollar.
The massive gains were a direct result of the underlying process being scaled in an exponential manner. Almost nothing else works like this, certainly not batteries. The basic chemistry and efficiency of batteries, including Li-on has been pretty much the same for decades. There are occasional improvements in chemistry or anode construction or whatever, but these are a few % here or a few % there, and many claimed improvements don't pan out at all . That's nothing like the doubling of transistor density that continued for decades. In particular, the total storage of batteries is related to number of atoms of the active ingredient, and that generally puts a fairly hard cap on size and other efficiency factors.
Batteries are becoming cheaper because the production has been scaled up and efficiencies of scale achieved, but this will probably follow a similar curve as for any other popular product like lettuce or vehicles. There is no magic  and you'll hit a wall pretty quickly.
 Just go back five years and look for "big" battery news, e.g., big suggested improvements in any characteristic and see if any of them are being used today. Very few are.
 Of course there might be magic in terms of a very different battery chemistry, or some totally new way of storing energy that replaces batteries. There have been a lot of contenders over the years, but very few winners. A look at the periodic table also indicates that when it comes to batteries you can do better than Li-ion batteries, but not that much better.
Those Lithium Ion batteries that haven't changed in decades? They were only commercially released in 1991, less than three decades ago.
I feel like people have a hard time seeing that a curve is still exponential when it moves at ~4% a year, as batteries have for the past century or so. But that still means that the technology could effectively double in ~15 years. How many ICE applications become irrelevant at that point? And which ones become irrelevant at various points in between?
The battery revolution is in full swing.
I mean the basic chemistries haven't changed in decades. Li-ion batteries were understood and experimented on long before they became commercially viable.
The basic chemistry is the same as it was back then. There have been various improvements in packaging and chemistry/anode tweaks that have maybe resulted in a doubling of capacity in that time.
> I feel like people have a hard time seeing that a curve is still exponential when it moves at ~4% a year, as batteries have for the past century or so
It is actually a hard problem to see if something is exponential at very low growth rates. Like the economy used to grow at 5%, then 4%, then 3%, now 2% - is it really growing "exponentially" or are we trying to fit an exponential curve to something sub-exponential?
After all, if you take the measurement of anything at times T0 and T1, you can calculate the rate of growth in % terms, which by its very units implies exponential growth, but it may not be.
So if Li-ion batteries keep dropping in price by say 15% +/- 5% for the next five years, you won't really have enough info to say who was right. You can fit other curves to that data. Only when you have many years with a high enough growth rate, like Moore's law, can you really be sure exponential is the only curve that fits.
> The battery revolution is in full swing.
I don't disagree - batteries are everywhere and becoming cheaper and better in many respects. It just won't look anything like Moore's law long term.
Basically, predictions are hard. :)
That being the case, the relevant question is not whether the prices will continue to drop forever at the present rate. Rather, the question is whether they will drop low enough to make the transition possible.
Well, they are already low enough to do that for some uses, and a good deal more price reduction is expected in the coming decade, so it seems the answer is yes, they will drop low enough.
And what then? In term of energy contained in atoms, current batteries are many, many orders of magnitude away from the theoretical maximum energy density of matter. (And so is liquid hydrocarbon fuel.)
Not at all. Existing cathode materials have a theoretical coulombic capacity of about 200 mAh/g (mostly less than this value, a few more have more). So for a 45g cell like an 18650, you are looking at 9,000 mAh maximum in the impossible world where your battery is 100% cathode, no anode or electrolyte. Those cells are already > 3000 mAh, so there is no way there are orders of magnitude between current batteries and the hard cap.
On the contrary, for contemplated chemistries the practical hard cap is probably less than 2x current capacity/weight values (since you need a significant amount of anode and electrolyte in practice), and almost certainly less than 3x.
> Current batteries throw away enormous capacity due to the safety constraints in preventing thermal events.
If by "current batteries" you mean current chemistries like Li-ion and existing and contemplated cathode materials, then this is not correct. The batteries have essentially the ideal material ratios within the existing manufacturing capability. That is, if you were willing to have a much less safe battery with the same materials you would gain almost no capacity. The main concession to safety is when a safer cathode material is chosen, like LiFePo over cobalt or whatever.
so to get to /4, you would need a 12x increase.
>since one of the reasons liquid fuel can store so much energy in such a compact and lightweight form is that it doesn't require storage of one of the primary reactants (oxygen).
the main reason is the covalent bond is stronger. using air will only double the energy density for fuel( 1x fuel instead of /2 fuel /2 oxygen.)
The same principally applies to almost anything. In fact, for typical physical products the saying is that double the production will halve the cost. This is no different. Moore's law was much the same, just that it's scaling was much faster than anything seen before, such that every 18 months we were able to halve the costs. And of course semiconductors revolutionized almost everything.
For li-ion batteries, this seems to be every 4-5 years and has been for the past 20 years or so. Rumors have it that Tesla is even beating this...
Call it "Ric's law": every 4-5 years li-ion battery prices will halve ;)
That's not "efficiencies of scale" - that's fundamentally making something much better due improved physics, with the same amount of work. It particular, it would apply even to "small" producers.
Now don't get me wrong, CPU manufacture was also subject to traditional efficiencies of scale: the biggest fabs got bigger, and a few large players squeezed out the rest and were able to sell more and average our their R&D costs over more sales, but that effect is small compared to the million-fold improvement in the underlying physical design.
Batteries have no such scaling. The power stored is basically related to number of lithium ions and the capacity of the anode to accommodate them all. There are some small efficiencies: you can increase efficiency from 80% to 90%, but never to 2000%. You can make materials thinner or cheaper. You can change form factors to use materials more efficiently. You can standardize on battery sizes to make more use of a single production line. You can secure long term lithium contracts and open more mines.
These are all the traditional "efficiency of scale" things and they all hit a wall pretty quickly. You could probably easily sustain a 15% reduction for a while longer, but certainly not 40 years like Moore's law.
> The same principally applies to almost anything.
It doesn't, just look around.
What else has decreased in cost by a factor of a million over the past few decades? Cars have increased in popularity by many-fold since the 40s , and after an initial period of traditional "efficiencies of scale", costs have remained relatively fixed.
Look at any random food product that suddenly increases a surge in popularity, perhaps reaching a 10x sales multiplier: final cost and production costs don't drop 10x.
If all of a sudden we start eating 2 avocados every meal they aren't going to start costing 10 cents.
> In fact, for typical physical products the saying is that double the production will halve the cost.
I can imagine this rule is true... up to a point!
That's the "traditional efficiencies of scale" at work: it's usually an S-curve . If you want some custom widget, you are probably going to have to pay $100 for the first one, and $1 each or whatever for your run of 100. When you order one million, maybe it drops to 1 cent. When you order a billion, they don't cost 0.001 cents though.
You don't have to take my word for it though: just look at any two big companies, but where one is bigger than the other, and look at their costs of production. Let's say Coke sells 5x as much as Pepsi: does Pepsi cost 5x as much to produce? Not all, they are virtually identical.
Many models of vehicles sell 10x or 100x of some unpopular rivals, but the production cost is about the same.
 Approximately, at least - although it depends heavily on the product. For example, the initial part of the curve might not be very flat for some things (e.g., with large fixed one-off costs) - but they almost all share the "rightmost" flat part of the S-curve.
Li-ion batteries are typically spooled in layers  (see https://en.wikipedia.org/wiki/Lithium-ion_battery#/media/Fil...). The thinner the layers, the higher the capacity as you have a smaller distance between positive and negative layers. From my discussion with battery chemists, this is what is primarily driving the annual ~15% reduction, economies of scale also obviously playing a role.
Unsure what the theoretical limit of battery size layers is, and how far off we are from that, but the thinner we get those layers, the higher capacity the batteries per weight and also presumably price.
I'm arguing it's not at all all similar. The capacity of a lithium ion battery is fundamentally limited by the amount cathode material it contains, along with sufficient electrolyte to support it, just like any other battery. Making other materials thinner, allows you to stuff in more of this stuff, and other changes in the arrangement may make the process more efficient, but up to a limit. There is hard cap to usefulness of all of these processes, at the "theoretical efficiency" and in principle softer caps before that point long before you approach the theoretical caps.
If you have a chance, ask the battery chemists you know what the best-case storage is for a particular chemistry and cathode material, compared to what is available today. I don't think it is more than 10x aware and is probably much less.
That's very different than CPU scaling where you started out many billions of times away from the physical limits of the computational capacity of the material, and many trillions away from the theoretical physical limits of computation.
So no, thinner stuff isn't going to sustain a 15% annual increase in efficiency . In fact, I don't think think it will even sustain a single 15% increase from today until the end of time.
Of course, there are many other vectors along which battery efficiency can increase when the denominator is "cost", even if the storage/size doesn't increase much. You can increase manufacturing efficiency. You can introduce new form factors. You can tweak the chemistry. You can carefully match the required discharge characteristics to the application. Outside of the battery itself, you can improve charging and discharging algorithms, you can use finer-grained control over smaller groups of batteries, you can improve thermal management. However, these are just in the range of normal industrial optimizations that apply to any product. You can replace "batteries" with "lettuce" in the above and come with a similar list.
 To be clear, there is no 15% increase in battery efficiency per year, when measured by volume, weight or other physical characteristics: that stat must involve "price". Panasonic, the best and biggest Li-on player out there, has barely budged in efficiency on their headline battery, the 18650.
It's entirely possible that with an exponential increase in production volume (i.e., funding) we could see some new chemistries appear.
Compare to Silicon Carbide (blue LEDs) and Gallium Nitride (power transistors).
The question is how much it will buy us.
Unlike other domains where theories or algorithms or medicines or whatever appear almost "out of thin air", the periodic table is limited and the mechanism of battery operation is well understood, so I think there is already a pretty good grasp on the possible materials that can be used, even in theory.
For example, Lithium is used for a reason, something like it's electron carrying capacity per unit weight. There are no other elements waiting to be discovered that are going to be better. Cathode materials are more complicated, but I don't think there is any order of magnitude improvement hidden out there.
I could certainly be wrong.
What is "it" that happened? If you are talking about sustained exponential cost reductions over a period of decades, like Moore's law, then maybe it did happen from a very high starting cost, but it won't continue.
Any market can undergo a rapid reduction in prices over a short period of time, as a product increases in adoption by one or more orders of magnitude.
You could fit an exponential curve to that growth, but ... it will almost never be sustained. The future is what we are talking about here.
Let's take solar modules as an example. From something like  prices have dropped from about $4.00/watt to $0.30/watt in 10 years. So that's a price drop of about 23% per year (each year is 0.77 the price of the previous). So today, at 30 cents/watt a 300W panel (the big ones you see on houses) is about $90.
If that is really a sustained exponential drop, those same panels will be $6.75 in 10 years. Possible? Yes. That said, I don't think you can find almost anything that big and heavy almost anywhere for $6.75. Maybe bricks or gravel or something, I'm not sure.
10 years later, those same panels will cost 50 cents. Possible? No way. You aren't going to ship a 300W panel anywhere for 50 cents. You aren't going to have space in your warehouse for something that big for 50 cents. You aren't going to be able to buy even the basic raw materials like glass and aluminum for 50 cents.
There's a common theme here: for something to scale exponentially, at a fixed size, every part of the process has to scale exponentially. The cost of shipping was irrelevant when the panels were $1,000, but it becomes pretty important when you are trying to ship something that weighs 100 lbs across the world or even a country and sell it for less than a dollar. The basic raw materials are a pittance with $500 panels, but they dominate the cost if you are trying to sell them for 50 cents.
The only way this exponential scaling works is if you can make something roughly the same size exponentially more efficient. That's that happened with CPUs. The CPU itself was more or less the same size for decades. They made them in similar fabs. There were some "traditional" efficiencies of scales thrown in, like moving from 200mm wafers to 300mm wafers, but the only thing that allowed exponential improvement was that the chips themselves became a million times more efficient without increasing in size or (mostly) the consumption of any raw material.
CPUs didn't scale up a million times by building a giant fab the size of a country, and using wafers miles across and mining silicon from the moon, which would be how a traditional process would scale up: they scaled up by becoming internally a million times more efficient.
Solar cells don't have that type of scaling available to them. There are hard limits on the efficiency (which is already above 20%) based on the physics involved - but even without any reference to cell physics there is a hard limit at 100% which means the efficiency upside is at most a one time 4x gain from here.
Batteries are in a similar position as solar was a decade or two ago. The grid operators desperately need storage capabilities, and li-ion is one of the more promising solutions, but it's still too expensive. But another decade of cost reductions can change that. No one knows for certain if it's possible, but like I said in my original post, no dramatic technology changes are really needed, just better logistics and scaling could be enough.
The OP did, which is what I was responding to. He mentioned the current exponential decrease in battery costs, and said "I see no reason for that not to continue".
They then drew a direct analogy to Moore's law to explain how such exponential gains can be sustained. I disagree.
Of course, even the GP probably agrees they won't continue "indefinitely" but my claim is that they can't even continue for very long (the higher the rate of cost reduction, the shorter it can be sustained).
> But it is a fact, that solar experienced that type of cost reduction for a period of 2-3 decades.
Kind of, there were certainly long periods of stagnation in solar panel costs, but also periods of large drops. It also depends how your pick your starting point.
One has to ask (as you did) whether today's batteries are more like the low-volume niche product of 70s solar panels, or more like today's solar panels. I'm willing to bet the latter, both because batteries have seen substantial investment to date (I'd wager much more than solar panels), and because the existing scale of battery manufacturing is already massive (c.f., gigafactory). Furthermore, there are no apparent revolutions in battery technology on the horizon.
So rather than being at the start of a precipitous drop in battery prices, I think we are somewhere near the middle, and the drops from here will mostly slow down not speed up.
Are they using significantly different technologies for the individual cells? I always found it weird that the large battery in a Tesla, for example, was just made up of thousands of 18650 cells that are probably smaller than the battery in your phone. Is the Powerwall is the same?
Does it get any different at larger sizes? Obviously stuff must be different outside of the cells, even if the cells are the same.
/aside With world human population forecast to decline, efficiences and economies of scale will be less in the future.
The real reason we need strong AI - as consumers.
Why would that continue? Surely materials costs become more significant as other costs go down, which must be harder to reduce?
More importantly, a ton of lithium mined will be used for decades; when all of the Model S/X/3 battery packs are end of life (10-15 years from now), those modules are going to be remanufactured into stationary storage (or recycled entirely through a destructive extraction process, depending on degradation and next use case). This is similar to how your recycled pop can might end up in the aluminum used in a new light truck or an aircraft fuselage (edit: poor example; a better example would be automotive parts that are remanufactured and put back into service).
The smartest thing Tesla ever did was finance battery manufacturing using luxury vehicle margins (stoking demand with a sexy, desirable brand), and have those customers (including myself) finance the depreciation and capital carrying costs of those battery sleds they'll use again in the future. I am not a Model S owner; I am the temporary user of 100kw of energy storage, which will eventually make it's way into stationary storage where mobile energy density (ie pack degradation) isn't as much of a concern.
Panasonic and Samsung make Tesla's battery cells; Tesla simply assembles them together. For now they're the big kahuna because they've locked up output through contracts but when they don't control the primary input to their "biggest product" they're at the mercy of their suppliers and the market.
I think we also disagree on Tesla's execution. Tesla has just barely managed to avoid death many times. That's not successful execution unless you define success as not failing.
I don't know enough to say the true impact is different than the stated impact or anything like that. But I have my suspicions that something isn't what it seems with lithium production.
I have heard a different theory from a friend working in finance. He said that most of a GM/Toyota car is made by suppliers, but Tesla does almost all the components of its cars by itself, capturing all the profits. He said that most car manufacturers are actually only car assemblers.
Similarly, there are many PC brands like Lenovo or Dell, but they have to share their profits with suppliers like Intel/Nvidia/Samsung/Microsoft. Apple, also captures a lot of profits because they do not only assemble, they also make software and hardware.
> Working with Umicore has allowed us to completely recycle the Roadster battery packs profitably, without special financial incentives necessary to promote recycling
If you have a mass quantity of the same type of good, you can avoid most of these costs.
But suppose we never figure out a good way to recycle these batteries, and we just have to throw them all in a landfill and keep making new ones. Is that actually so terrible? There's nothing toxic in a typical li-ion battery, so basically we just have inert materials that were taken from the ground being put back in the ground. Mining for nickel/cobalt/lithium is not great for the environment, but the effect is pretty localized, so a "disposable battery future" is probably still highly preferable over the fossil fuel status quo where the entire planet is fucked.
I mean... yea?
I don't know but I look back to the 2006 Jeep Wrangler being almost entirely recyclable steel and had an effective life of 40+ years if taken care of. Then I look to new cars using composites and lithium that WILL go into a landfill 20 years or less because they're just not fixable in the same way, it's cheaper to write off of an insurance claim than to fix.
It almost seems to me there is no free lunch, but that people like new and shiny and the company with all the tech is going to be popular with tech people.
And if we're going to talk about people's irrational thought patterns about the environment... I nominate the idea that landfills matter more than atmosphere dumping, which seems to be based on the fact that landfills are more visible.
I would love to see the engineering details around the 'moat' that Tesla has with batteries.
if other companies wanted to build a new factory with panasonic, perhaps they could do that....and then we'll start to see their results sometime in the 2020s....
Source on their panels from Buffalo mostly going to non-Tesla installers?
The chemistry might also be finely tuned to work with their own battery management units, though I'm less sure of that.
This is the same as Anker; they use the same lithium cells in their products as almost all of their competitors. Their secret sauce is assembly the cells together with other components to make the final products.
On top of those bare cells, third parties may add protection circuits, or maybe Panasonic does it themselves in some cases.
Panasonic makes the cells, which is easy to do, to scale and to copy. Tesla's added value is the charging control for each cell in the battery pack.
For small currents, yes. For the huge current spikes both in draining and charging, or the continuous massive loads of supercharging? No. Same for the actual science: figuring out a way to pull/push hundreds of amps to the pack while taking care that no single cell is overloaded/overheated or that faulty or degraded cells are taken care of.
Graphite and lithium are the only things that aren't currently recycled. Lithium is too cheap right now- it makes up on the order of 1% the cost of a cell. It's more common than lead. We're very unlikely to have lithium supply problems. Compare the 7 billion tonnes of coal production, or 5 million tonnes of lead, to the 80 million cars sold annually. Mining in general can be scaled to far larger than anything car batteries would need.
Graphite is more of an issue. Battery graphite is very high quality spheroidal grains, roughly 55% synthetic and 45% "natural"- even the natural stuff goes through a huge amount of processing. Synthetic graphite can be made from anything, but natural graphite has slightly higher specific energy. Both types take a great deal of energy to manufacture, and natural spheroidal graphite would be a lot more expensive if not for Chinese and American coal.
Batteries are burnt as part of the recycling process, and even if they weren't there's no really good way to recover the graphite. So that probably puts a bit of a floor on li ion recycling savings. The elemental metals recovered are also not appropriate to directly turn into batteries, so they will probably get sold on the open market for lower profit.
The bottom line is that the only constraint on manufacturing batteries is the cost of energy.
The lithium is not recycled, due to economies of scale.
Same for the graphite.
There is no foreseeable shortage of either graphite or lithium, with the scale that we use it, and the scale that it can be found in the wild.
The majority of the materials in a battery, however, are recycled quite easily.
Are there any concerns to the mining of either element? I've seen some scare posts, but don't know enough about them to know if they were worth taking seriously.
That's part of it, but even if we had very large battery recycling operations it probably still isn't really worth it. It's not hard to get 90%+ recovery but the amount of lithium in a battery is ~3% by weight. Spodumene, one of the important lithium ores, is up to 8% lithium.
> Same for the graphite.
Graphite is more of a technical thing, it's pretty difficult to extract it and it's pretty worn down. The physical structure is very important to performance and manufacturing is virtually all of the cost of creating graphite- so having the actual raw material isn't worth all that much.
More than graphite, I'd actually prefer to see the organic materials in a li ion battery dissolved off and then distilled. That isn't economical though.
> There is no foreseeable shortage of either graphite or lithium, with the scale that we use it, and the scale that it can be found in the wild.
With any scale we could use it, there's no way we would run out. If we mined as much lithium as we do lead, we would have enough to make every car electric with ~200 kWh batteries and no recycling. And as I said, lithium is more common than lead.
> Are there any concerns to the mining of either element? I've seen some scare posts, but don't know enough about them to know if they were worth taking seriously.
Graphite is mined in the same places coal is, but very roughly 5 orders of magnitude less. It can also be created completely synthetically from any organic matter, same way they make charcoal or carbon fiber.
Lithium as it is currently mined is one of the least environmentally impactful extractions. It uses up a lot of groundwater which is a problem in some places, but it's more about it not being replenished properly. There's no runoff like there is with heavy metals in Africa. There's pretty insignificant land use. The chemicals used in purification are super benign- things like lime or acid, in millionths or billionths of global use. Brine mining means you don't need to dump any rock anywhere, there's no hole, there's no significant dust or blasting- it's just a very large water well.
I really hope that this is not exactly what the desperate end of the disposal chain will look like once it is fully formed.
Downvoted? I was intending to express that even with mining the raw materials, etc. it is probably a net positive environmentally.
Not necessarily price competitive with highly developed lithium ion batteries using the cheapest to access minerals, but cheap enough to make the world go round.
And another angle: our perception of energy density increase is heavily disturbed by the much faster reduction in cost, we are just not very good at telling those two apart.
Tesla's market cap, rounded to the nearest billion dollars, is $65B. Other large car company market caps:
* Toyota: $195B * GM: $46B * Daimler: $57B * Volkswagen AG: $71B * Ford: $33B * Honda: $49B * Nissan: $36B * BMW: $47B * SAIC Motor: $42B
I disagree. Tesla is a software company with products built around that. A Tesla car is a computer running their software, with certain physical enablements attached.
Batteries based businesses will do well for now but they should keep an eye out for new developments in energy sources for on time strategy changes.
We bought a 2 year old Leaf (30 KWh) recently after I worked out the TCO for it. Here's what I discovered.
We pay a lot of electricity here in Japan (I think it's about 30 cents per KWh where I live). So a full charge would cost us about $9 if we charged at home. Driving carefully we can get between 200-220 km on that -- so about 4.5 cents per km. Gasoline costs about $1.50 per litre and our old car had "mileage" of about 7 l/100km or about 10.5 cents per km (that's a lie because we have a 12 year old car -- it's really about 10 l/100km, but newer versions are near are more efficient, so I'll use that number). We drive about 1200 km a month (I say "we", but really it's only my wife -- I don't really like driving :-) ). So the difference is about $72 a month.
We also have to pay "shaken" here in Japan. This is a bit like the UK MOT. You have to get your car in essentially perfect running order every 2 years. It usually costs about $1000, or $500 per year. Because it's an electric car, the shaken costs are assumed to be small. We "prepaid" our shaken (i.e. bought insurance) for $200 for the next 4 years (or $50 per year). So that's a savings of $450 per year or $37.50 per month.
So rounding up, we're up to about $110 per month saved. On top of that there is almost no maintenance cost (oil changes, air filters, timing belts, etc). Let's say $120 per year saved (to make the math easy ;-)). So that's $120 per month.
But on top of that, we got this crazy deal from Nissan (or the government? or both? I'm not sure) where we get free unlimited recharging for 2 years and $20 per month after that. So that's a savings of $54 per month for the first 2 years and $34 per month after that (as long as we charge at the fast charging stations -- note, there are some negative implications for battery life for using the charging stations and it is a PITA to go and charge it all the time, so I'm not sure how true that savings will be).
Our previous car was a BMW 118i. The Leaf is every bit as good. If you turn the eco mode off, it has similar power (but of course a much nicer torque curve -- flat) so it's easy to pass or get out of trouble. In eco mode, it's a bit sluggish, but not really a problem 95% of the time. The Leaf has slightly better handling, but also slightly larger turning radius. Similar fit and finish. The Leaf seems slightly more spacious and has similar storage space. In actuality very similar cars in almost every respect, however the BWM is quite a bit more expensive.
So apart from range (which isn't a problem for us in any way), it's a pretty clear EV win for that kind of mid-size "nice" car. Probably it would be quite a bit closer if I were to compare to a Toyota Prius (especially in Japan where you can get a rebate), but I was amazed about how cheap EVs are now. It's pretty hard to match. If batteries come down in price, it will be impossible for sure.
Not sure how the numbers would work out in other parts of the world (especially in a cold climate), but it really is getting to the point where ICEs don't make sense any more.
Does somebody have numbers?
South Australia - where the battery is located - is an outlier in the Australian market due to its relatively progressive energy generation composition. It's worth noting the battery charge/discharge values depending on the market price of wholesale electricity. Arbitrage in action! :)
The application is open sourced and available here:
Our largest 3rd party, the greens just won't even consider nuclear, to them it's solar/wind or bust.
Of course, they have not actually done anything at all, which is the definition of Australian politics.
That said, you would think that the gas generator company could just bid the load they've agreed to supply under the long term contract into the spot market when the price dips negative. I assume there is a good reason why this isn't done.
That's impressive. I assume most of the saving is from grid stabilisation, rather than supplying/storing energy but still.
Why is this not more wide spread? These figures suggest this is a no brainer. Am I missing something?
It does make at least some sense in most places, though.
(The 90 minutes capacity at full output is pretty much an inherent property of lithium battery tech, as I understand it. There's a slight capacity vs power tradeoff which can be tweaked, but only within a relatively narrow band, and the maximum charging rate is if anything even less flexible than the discharge.)
Also, it looks like there's already a small-scale battery bank providing frequency stabilization using Samsung lithium ion batteries in West Texas: https://www.energy-storage.news/news/minimal-downtime-younic...
Even if that is true, that only means you need to expand your battery capacity and split into multiple banks.
The savings are because you can use the energy generated by green sources to charge the battery if you can't use it immediately. That's free energy you'd otherwise throw away.
"The French energy company revealed that the entire system cost 56 million euros (~$66 million USD)"
Not true. The system is used for grid stabilisation rather than large scale power storage. It doesn't have the capacity to power South Australia for more than a few minutes at most.
Grid infrastructure isn't exactly agile. It's politics.
The complete process is documented end to end, free to see, and the enroll process in documented and "cheap" (~150kCHF, 100kCHF being for the warranty). You can start playing in the ancillary services field with 5MW, which is not that much.
PS: If a company in CH needs help in that field (process approval or swissgrid-compatible IT systems), let me know !
The batteries didn't "save" $40 million of electricity, they enabled one entity (Southern Australia's power operator) to trade more efficiently against the other participants, who were the losers in this battery deployment in the form of reduced profits.
Regulators in many states are now finally forcing utilities to examine the use of alternative solutions to fix grid issues. They are finding that battery installations can do a better job than new generation or transmission in many cases and the batteries can be cheaper over the long run. It's just a matter of getting the utilities to try something new and get out of their typical playbook.
Why is this not more widespread? There must be some barriers.
I saw elsewhere that battery price is going down 15% per year. So, over time, more grid topologies will be able to leverage this technology.
Happens a lot with renewables. You personally don't capture all the value you provide. This is part of the reason that rooftop solar should get paid more than the going rate but even 1:1 rates get attacked as some kind of scam, even as they reduce peak load which may be literally 1000x more expensive than average.
After that, solar should get paid grid rate.
I have no idea if anyone has bothered to calculate what the solar-induced demand is.
The only plausible reason I can come up with is that the 'savings' are very hard to attribute correctly, but then I still cant explain why no one before today noticed the potential savings and took a chance.
Anyone with experience in the industry have any thoughts?
(b) Battery prices (and pricing for the balance of the system) have dropped pretty rapidly, I'm not sure why you're claiming otherwise. There have been recent years where these systems have dropped in price by ~25%. That's not insignificant.
Was the decision taken years ago? This is the 100 days or free battery. But yes I accept the power companies may have been slow. But still it isn't just Australia that was slow, its the US, Germany, Denmark, the world.
Australia's high prices were not due to a technology failure, but a regulatory one. The power generators were manipulating the market causing extremely high peak prices, and essentially being allowed to get away with it. Most other countries don't allow the market to wildly fluctuate so much, so the payback is far longer. Think decades and not years.
Not many investments offer that rate of return.
You may be right to suggest it may not be competitive in other locations though. I don't know.
EU is pretty good in that regard, it demonopolized the energy market, so if you build this battery yourself on your land you can just entered the market and start selling balancing offers. You will easily outcompete traditional producers and consumers on that market if the article is right.
The widespread rule of thumb was - batteries on grid level don't work. Seems this isn't true anymore.
I wonder if there was even the capability to manufacture such a large order at the given price point before Tesla built their gigafactory.
Yes, the entire reported savings was by avoiding building a fast-response generator, which would cost tens of millions to maintain each year.
From the article:
> Has contributed to the removal of the requirement for a 35 MW local Frequency Control Ancillary Service (FCAS), saving nearly $40 million per year in typical annual costs
The article several includes other significant benefits as well that aren't even included in the $40 million.
Energy arbitrage is still a thing, but a smaller percentage of revenue compared to grid services (at least in Australia).
Disclaimer: TSLA investor
Also the biggest issue with consumer batteries is typically heat management. Industrial batteries with proper thermal control systems will exhibit much better lifespans than a typical iPhone. Thus you should adjust your expectations for these batteries compared to what you’ve seen in consumer electronics.
Edit: see hwillis's comment down below, he/she is obviously more knowledgeable about the topic than I am. I was wrong.
If my math is correct, the battery needs to last at least 10 years to break even if you factor in the cost of recycling the lithium.
If the battery pays for its purchase price in 2 years and the disposal cost is 1/2 the price of a new battery (doubt it's anywhere near that), then the it would still pay for the total cost of ownership in 3 years.
Maybe the other metals in the batteries make it worth recycling, but not for the lithium recovery (with today’s tech).
Each loss would encourage different kinds of secondary uses.
After the last economically viable use for electricity storage, however, there has to be an economic incentive to actually recycle the raw materials. Presumably this is when value of the raw materials exceeds the cost of their reclamation.
> I believe they experience all of those.
Hmm...would that explain the CPU performance loss of an aging cell phone battery? Lower discharge efficiency = less power available for the CPU = CPU throttles itself to lower power usage?
Probably because Tesla undersells their batteries. During hurricanes or other disasters Tesla routinely unlocks the software limit, allowing customers more range (https://www.teslarati.com/tesla-unlocks-full-battery-capacit...).
It's the same with HDDs and SSDs, which always carry a decent safety margin to account for media wear.
For kWh capacity it's just a matter of counting the cells. Actual kWh will vary abit by measuring technique but I assume there is a way to drain the nominal Wh:s from them.
"But, overall, the data offer some basis for confidence that a Tesla Model S will lose—on average—less than 15 percent of its battery capacity over the average 150,000-mile (250,000-km) life of a vehicle."
$40m * 4 = $160m
$240m / $40m = 6 years
Edit: Mixed up cost and income?
Are already delivering zinc-air batteries which have many advantages over li-ion with one huge disadvantage being low power density - not a problem for grid storage. AFAIK if you shorted such a battery it would bleed out its charge without much fanfare.
But the scale isn't there yet since only recently someone was able to finally demonstrate a rechargeable zinc-air battery.
Regulation delays this (inevitable) blow up, allowing the magic-box seller to oversell the market before prices are allowed to adjust to snap down to what would have been the post-magic-box equilibrium without regulatory friction.
Electric-utility arbitrage batteries are basically physical call-option contracts: you pay a premium for the right to purchase electricity below market rate. The question for a firm assessing this gambit is, is the ratio of the premium to in-the-money(ITM) payoff time profile worth the premium.
I'm not convinced these battery packs are as durable as they say.
I'm sure the battery can come online faster, but a it seems like a small battery can provide the "quick response" while the gravity-driven generator comes online.
That's true of things like pumping water upstream, but I was thinking of something like this: https://qz.com/1355672/stacking-concrete-blocks-is-a-surpris...
I'm curious how much real estate it would take with that approach to equal the energy storage capacity of the Tesla battery.
>A 120-meter (nearly 400-foot) tall, six-armed crane stands in the middle. In the discharged state, concrete cylinders weighing 35 metric tons each are neatly stacked around the crane far below the crane arms.[...]
>The system is “fully charged” when the crane has created a tower of concrete blocks around it. The total energy that can be stored in the tower is 20 megawatt-hours (MWh), enough to power 2,000 Swiss homes for a whole day.
That seems like a huge hassle for a relatively meager storage. You'd need more than 6 of these to match Tesla's giant battery. Sounds like it would be an eye-sore too, but that's always a bit subjective. Maintenance-wise it could be rather tricky too, the article mentions complex systems to lift the blocks.
Also most of the $40m/year saving of this battery is that it can respond in 100 ms which means they don't have to spend so much money buying electricity from other people when demand or supply changes suddenly.
Seems to me the Tesla system would have a much lower total cost of ownership as its a solid state system (and perhaps even construction costs - getting that much concrete in one place for the tower system would be a large expense). Plus the batteries can respond much faster and more efficiently to changes in electricity needs.
Near-term, the batteries will probably be more expensive (replacement) than well-maintained mechanical/gravity systems. Longer-term, upcoming battery solutions may erase that advantage.
The more you shave the most profitable peaks and fill the deepest valleys, the less volatility you have to work with.
Particularly of interest is the "Simulated Inertia" market, where the battery operates without a frequency deadband configured.
That's incorrect. Batteries don't have any rare earth metals. You're thinking of cadmium telluride thin film solar panels, which have been replaced by silicon solar. They were a contender for cheaper solar panels, but it didn't work out in the end. They were also so terrible for the environment that they tainted the reputation of completely unrelated technologies.
> When these are worn out in 10-15 years how much environmental impact is there to replace / refurbish / recycle them?
It seems likely that the battery will last a lot longer than 15 years, but Tesla gives 15 years expected and 10 warrantied. Disposing of li-ion batteries involves shredding and burning them, which leaves behind a ceramic clinker (sold for concrete filler) and several metals (nickel, cobalt, copper, aluminum and steel in order of importance). Cobalt and nickel are the only hazardous materials and are fully collected since they're also the most valuable. Lithium is not cost-effective to recover; it's sold with the clinker.
The incineration process only gives off CO2 and water. This comes from the electrolytes and plastics being burnt. It's obviously not great and the heat isn't captured for use (AFAIK) but there's no other pollution and the net CO2 savings are still great.
NiMH batteries do contain mixed rare earth elements (mostly lanthanum), but the particular elements used are fairly abundant. And of course NiMH batteries look like they can't keep up with lithium ion and will see their niche shrinking further.
> The cadmium doesn't leak out of the panel any more than arsenic leaks out of cell phone power amplifiers.
The actual cells are perfectly safe but the mining and manufacturing process is not. The extremely lax controls in China 20+ years ago aren't representative of the present, but they did do terrible damage and mining cadmium will always cause contamination.
> NiMH batteries do contain mixed rare earth elements (mostly lanthanum), but the particular elements used are fairly abundant.
Yes! That's what I had been thinking of, besides magnets obviously. Lanthanum is also notable in that it's used to make gasoline, along with cerium.
I had an argument with my Dad the other week, he wasn't convinced by electric cars because of the battery disposal situation, complaining he finds it hard enough trying to dispose of a normal battery in a petrol car, so couldn't see the environmental benefit of electric cars
I didn't have a good response because I didn't know either.
The li-ion batteries that power EVs don't have acid. The majority of the chemicals are actually totally innocuous- the carbon, plastics, electrolytes and about half of the metals are downright boring. Steel, aluminum, copper, polypropylene, carbon- lithium was in all the water you ever drank. I wouldn't drink the electrolyte, but it's basically just fancy grease/oil. The only two dangerous ingredients are nickel and cobalt- they aren't as bad as lead, but they aren't good either. They're also the easiest to extract and the most valuable.
To recycle a battery, you dump it into a shredder and then into water. An electrochemical process is used to suck the metal off, a lot like how they plate metal onto things (but in reverse). The leftovers are strained out, ground, and eventually burnt.
I think the bigger problem is getting people to actually recycle them, which shouldn't be a problem with these larger batteries in cars and buildings. Already the auto industry is really good at "recycling" parts by selling "cores" taken out of a car for replacement which get rebuilt and resold later, so the logistics and incentives are all there for it, and many are already buying hybrid batteries and doing the same process for them.
Looks like 60-70% was being recycled in 2011. I imagine that's improved.
Edit: here's more recent (and more detailed) coverage of Tesla's recycling
I imagine big utility-scale and car-size batteries are easier to recycle than the tiny cells found in laptops and phones. The latter tend to be less standard and due to their small size and exotic packaging are going to have more packing material and plastic vs. "good stuff" like lithium.
How's the projected rate of return on that guy look?
It's about time people realize "green" can be profitable.
South Australia has the cleanest grid in Australia (except Tasmania), with extensive wind generation, but does not have the nuclear and hydro resources that somewhere like Ontario can call on. Thus it depends, at times, on dirty, lignite-fired imports from neighbouring Victoria for balancing. By building more solar and battery storage over time, SA can reduce the need for imports (and expensive gas-fired peakers), making their grid even cleaner.
We have moderately priced electricity that is very clean and reliable. If the rest of the industrialized world looked like Ontario electricity-wise, we'd be decades ahead of where we are in fighting climate change.
Wind and solar subsidy policies based on ??? Other than “wind and solar are good, we should pay whatever it costs, locked in for decades, to switch to it”.
So now I pay a $37/month fixed fee on top of my $17 in actual electricity use.
Historically, an entire building would pay one delivery fee. Albeit higher, but still less than every unit paying its own monthly fee.
A stupid way to encourage conservation (by the lowest electricity users anyway) when they have to pay more in new monthly fees than they could ever save by conservation.
Edited for clarity: For people that are in the know regarding grid-level energy: is this the path of least-resistance for renewable adoption? I.e. Renewable+energy storage for peak demands, something else for baseline production?
I'm not sure what this question is really asking? Better ways to store it to match supply to demand?
In response to edit:
> is this the path of least-resistance for renewable adoption? I.e. Renewable+energy storage for peak demands, something else for baseline production?
This is a false dichotomy. There is baseline demand; on the other side the supply can be divided into dispatchable and non-dispatchable. Renewables can't be turned on by demand, so they're non-dispatchable. Perhaps surprisingly nuclear plants go in the non-dispatchable class; they produce a constant amount of power, apart from occasional month-long shutdowns for refuelling or maintenance.
The path of least resistance is to just keep adding more wind and solar, for the time being. A certain amount of highly dispatchable gas plants are needed to cover the difference. The tricky thing is working out how they should be paid, as they run less and less often.
The battery is then just another piece of dispatchable power generation, and can be paid to cover peaks.
Eventually we reach a point where the spread on the spot market between high and low prices becomes very wide: there will be times when electricity is being given away, and times where a plant is fired up a few times a year to cover midwinter. A good market for more batteries.
But kidding aside, how long are these batteries really supposed to last?
This means that these sources, along with industrial efficiency and scaling, they are in effect a virtual battery installed more quickly, and more cost effective than the battery.
It is estimated that by 2023 the whole state can be powered by rooftop solar alone. The battery is good to suck up the excess wind power, and provide energy in times of need.
There's still lots of peaks the wind+solar combinations don't cover. Like high frequency trading, the batteries are able to act quickly to demand peaks outstripping supply.
However, most times this happens is on a hot day... and on those days it's extremely predictable. These are the times when gas wins. It's also the time when rooftop solar is the most cost efficient.
Around 2020-2023 rooftop solar will decimate the gas providers. The wind farm batteries will probably still be useful in these times however.
How long will that demand last? Will the prediction technology and dynamic industry power usage (including desalination plants) come online by then? What about smarter cooling technology? That's be rolled out too.
One of the states main industrial power users also has started building solar and pumped hydro. Reducing gas further. These molten pools of metal are very much like virtual batteries.
The wind farms have lots of excess sometimes. Well, that is being exported across state lines in these times. There's much more than can fill such batteries. Note that in times of excess wind, the gas is still burning at a less rate. Even though there's more than enough 'free' wind energy to cover their use. I expect this will change in time.
What about other wind farms coming online in other parts of the state? These are supposed to cover the current valleys in power generation too. If all of the wind that is under construction or planned comes online by 2023, that's more than enough to cover the needs of the state even at peak... let alone the valleys.
Electric car technology is expected to generate some demand, but mostly this will be charged with the excess rooftop solar/wind.
Large batteries like this are an important, but stop-gap measure. It's cheaper to build another wind farm in a very different part of the state which has the same effect. Because it can fill up the valleys in power generation where the batteries currently snipe good returns. Probably they would be cost effective to buy more in the next 1-2 years, if they can be installed much more quickly than wind farms (that often require approval, whereas the existing wind farms can be fitted out with much less of an approval process).
"Some writers of Electrek maintain positions in $TSLA and other green energy stocks"
Sure, they are biased, and quite openly so. It's quite obvious from looking at their site that they are not funded by the oil lobby and they are most likely somewhat concerned about such things as global warming and other tree-hugger stuff. It's not like they are being very secretive about that.
However, that does not discredit their articles or mean that they are wrong about stuff. They generally do a fairly decent job of separating their opinions from facts they are reporting, linking to source materials, quoting individuals, etc. Decent journalism in other words.
In this case they are reporting some simple facts, citing a few key people, and voice some opinions/interpretations that don't strike me as outrageous or unreasonable. There's no need for them to up sell/sugar coat this in any way.
I think everyone without a vested interest in oil or short selling Tesla wants (or should want) to see them succeed. You don't need to own Tesla stock for that.
Electrek is generally one of the first sources to post about tesla crashes or things catching fire with the facts and then their own "take" towards the bottom. The guy who runs the site (Fred Lambert) also is extremely active on the r/TeslaMotors reddit community.