Battery Repair/Upgrade

Battery Repair/Upgrade

I was talking with a buddy over lunch about the Model S, residual value and the battery. An ICE option's value at 100K miles and 8 years in service is determined mostly by the condition of the car. Were the scheduled maintenance items done on time (oil/other fluid changes)? Did the owner treat the car well? Is the interior/exterior in good condition? If the engine runs well then it would be reasonable to assume you can get another 50K out of it. In short, you can look at it and form a reasonable opinion based on condition and previous experience.

Barring any knock down drag out quality issues, the battery will be the 800lb gorilla when it comes time to sell the MS. So, what will happen with these packs?

Let's say Tesla sells 10k cars per year for the next four years. That's 40k cars and thus 40k batteries to contend with. There is a lot of financial incentive to have a well thought out cost effective service solution. That volume doubles at the end of the 85kw-hr battery's warranty period; an even bigger incentive.

Extracting from experience with memory (another fast moving expensive commodity), I would be willing to guess that Panasonic will increase capacity instead of decreasing cost. Looking at SD cards and USB drives, the trend seems to be to backfill with more capacity and maintain a minimum price point. There comes a price point where there is simply not enough money in building the singular item to build it. Call it a price floor for that item.

The cells used in the MS probably play by that same limitation. When you need battery service years down the road the cells used in your battery will probably not exist. Even if they did, there is a relative age difference between the replacement cells and those still in service in your pack. The capacity difference would be problematic. The solution will likely be to replace all the cells in the pack along with either re-flashing the firmware or simply upgrading the battery management boards to current production to match the new cells.

Circling back to the memory analogy, I suspect getting major battery work in the future will cost just as much as it does today. Capacity will go up but the car's internal charger will still only supply so much current thus charge times will go up proportionally with the increased range.

Ultimately this should put the MS' valuation squarely in the camp of aircraft evaluation. Airframes are reasonably stable once the initial new car smell depreciation is done. Most of the valuation process involves maintenance on the engines and where they are in their overhaul cycle. The same might be said for the battery. The real question for me is how the secondary market evolves when the two and three year old cars start to appear in numbers.

The above came from an hour long conversation with a buddy. I'd love to hear differing opinions.

Volker.Berlin | November 26, 2012

Two thoughts:

1. The battery is made up from more than 7000 cells. If cell capacity increases and price stays the same, simply use a fraction of those 7000 cells to achieve your desired price and range. Tesla buys the naked cells and assembles them into their batteries in Fremont, so they can really scale them to their (or their customers) needs. If we ever get to the point where a single cell can store enough energy to power the entire car for a couple hundred miles and still costs the same as a cell today (give or take inflation) ... well, we'll deal with that "problem" when we have it! ;-)

2. I don't know about memory, but Tesla's batteries will be highly recyclable. The battery as a whole may be "worn out", but the valuable material is still there and most of it can be extracted relatively easily. I don't have a pointer handy to a "Tesla battery recycling program" but given the sheer value of the raw material in the battery (and Tesla's environmental mission) I have no doubt there will be something like that. You'll trade in your old battery for a new one and will get a significant rebate in return.

Volker.Berlin | November 26, 2012

In fact, I didn't realize it while typing, but I didn't make it up. I must have read that blog post a long time ago:

There even was a corresponding press release:

(Google rulez!)

lolachampcar | November 26, 2012

I like the idea of 30% increase in capacity == 30% decrease in cells/weight. In theory, the car could get lighter with age and actually increase in performance/range with the same 85kw-hr capacity.

Sounds like marketing material to me :)

Timo | November 26, 2012

Capacity will go up but the car's internal charger will still only supply so much current thus charge times will go up proportionally with the increased range.

...for full charge. If the currents stay same you get same charge (and range) at same time with 85kWh and 285kWh batteries. This is not a drawback.

AFAIK you will change whole battery pack at the end of the pack life with equal or better, not individual cells so whatever individual cell can do is not an issue here. If the power density increases with the capacity there is nothing that would prevent to simply using less cells, so battery pack costs would go down.

Pack is probably the only part of the car that loses value rather quickly, so that's what will determine the future cost of your car. Electric drivetrain is for other parts pretty eternal. Electronics probably need replacing at some point, but electronics are cheap.

lolachampcar | November 26, 2012

yes I forgot to mention 30% cheaper if the capacity goes up while the price point stays the same.

For me, the neat part is that the car's performance is battery dependant (considering its percentage of overall weight) and thus performance can GO UP. Buy and M5 and expect it to loose 300lbs of its weight and thus go faster with time...not going to happen. It could actually happen with a Model S.

I'd really like to hear Tesla's thinking on this at it could be a real selling point.

nickjhowe | November 26, 2012

Interestingly in one of the UK interviews Elon again referred to an '8% annual increase in battery performance', and went on to say that his focus was on reducing weight not increasing capacity. My guess is that he thinks that with 150 mile separation super charges an 85kWh car is good enough and the focus now is to use battery advances to bring that into Gen III with much lower weight. (8% a year for 5 years means the same capacity would way 45% less.)

Brian H | November 26, 2012

GenIII and replacement MS priorities would be different.

Volker.Berlin | November 27, 2012

He routinely brings up that 8% number, alternatively for expected decrease in cost or expected increase in performance (which in this case really is the same, as has been explained above). However, he is also always entirely clear, that these 8% are not a given at all. It's his personal estimate (which aligns with the expectations of some "industry experts") but a significant deviation from that number, in either direction, is entirely possible.

Vawlkus | November 27, 2012

I keep thinking about the supercharges and thinking that if Tesla buys back old packs for use in their supercharger stations, what kind of a price difference would that put in replacing Model S battery packs?

Vall | November 27, 2012

I find it highly improbable that you will be able to sell an 8-year old $100k ICE car for $50k, even if all maintenance was done regularly and it is in mint condition. Looking at 8 year old Mercedes S500 or a BMW 750i from 2004, they are nowhere near 50k, and if there is one out there, probably no one will buy it. Expensive luxury sedans are known for rapid depreciation. And yes, using stacked old batteries in supercharger stations is a perfect application that will greatly increase the lifespan of the batteries and get the most out of them before they need to be recycled.

jkirkebo | November 27, 2012

Another usage for worn out batteries could be for off-grid applications. I'd love to have a 60-85kWh Model S battery with 60% capacity remaining powering my off-grid cabin in the mountains. Currently I'm using 3 4V Surrette batteries which combined weigh as much as the 85kWh Model S battery but only supply around 10kWh usable capacity.

Someone would have to build a MPPT solar charger for the battery though, and an inverter for 230V 50Hz (at least 3.6kW).