Musk sig­nals cheaper Tesla could be com­ing

Bat­tery ad­vances could set stage for $25,000 EV 3 years from now

The Standard (St. Catharines) - - BUSINESS - NI­RAJ CHOK­SHI

Tesla is work­ing on cheaper, more pow­er­ful bat­ter­ies for its elec­tric cars, but many of the re­quired in­no­va­tions are still works in progress, its chief ex­ec­u­tive, Elon Musk, said Tues­day at a much an­tic­i­pated pre­sen­ta­tion at the com­pany’s Cal­i­for­nia fac­tory.

The ad­vances could ul­ti­mately cut bat­tery costs more than 50 per cent and in­crease the dis­tance Tesla’s ve­hi­cles can travel by nearly as much. That would set the stage for the com­pany to make a “com­pelling” $25,000 (U.S.) elec­tric ve­hi­cle three years from now, Musk said, speak­ing to a park­ing lot full of Tesla own­ers in their ve­hi­cles, honk­ing in ap­proval.

But Musk, who has a rep­u­ta­tion for promis­ing gamechang­ing in­no­va­tions that of­ten take far longer than ex­pected or never ar­rive, said the com­pany had not yet made the ad­vances needed to get to that point. In­vestors were hop­ing that Musk would an­nounce a ma­jor tech­ni­cal break­through, in part be­cause of the way Tesla had pitched the Tues­day event, which it called “Bat­tery Day.”

The com­pany is pi­lot­ing pro­duc­tion of bat­ter­ies at its car fac­tory in Fre­mont, Calif., and plans to build a cath­ode pro­duc­tion plant some­where in North Amer­ica, Musk and Drew Baglino, se­nior vice-pres­i­dent of pow­er­train and en­ergy engi­neer­ing, said at the event.

“It just re­ally bodes well for the fu­ture, and it means that the long-term scal­ing of Tesla and the sus­tain­able en­ergy prod­ucts we make will be mas­sively in­creased,” Musk said.

Bat­tery ef­fi­ciency is cen­tral to suc­cess in the elec­tric car mar­ket. The cost of bat­ter­ies typ­i­cally is the sin­gle big­gest ex­pense in pro­duc­ing such cars.

Tesla has an edge, for now. The com­pany’s Model S Long Range Plus can com­plete a 400-mile jour­ney with­out need­ing to be recharged, which is much far­ther than elec­tric cars made by tra­di­tional au­tomak­ers like Audi, Gen­eral Mo­tors and Jaguar.

But an up­start ri­val, Lu­cid Air, which is run by a for­mer Tesla en­gi­neer, says it has de­vel­oped a car that can go more than 500 miles on a sin­gle charge.

De­spite those com­pet­i­tive threats, Tesla has en­joyed a re­mark­able year. Its stock price has in­creased more than eight­fold since it re­ported a quar­terly profit last Oc­to­ber. And the com­pany has main­tained prof­itabil­ity ever since, even as the pan­demic ham­mered the auto in­dus­try.

MICHAEL SHORT BLOOMBERG FILE PHOTO

Bat­tery ef­fi­ciency is cen­tral to suc­cess in the elec­tric car mar­ket. The cost of bat­ter­ies typ­i­cally is the sin­gle big­gest ex­pense.

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