Why Tesla Really Needs a Gigafactory 193
Hodejo1 (1252120) writes "Tesla has already put over 25,000 cars on the road with more to come and, presumably, most will still be running well past the 8-year battery warranty. What would happen if it is time to replace the battery pack on an old Model S or X and the cost is $25K? Simple, it would destroy the resale value of said cars, which would negatively affect the lease value of new Tesla automobiles. That's a big part of the real reason why Tesla is building its own battery factory. They not only need to ensure enough supply for new cars, but they have to dramatically bring down the price of the replacement batteries low enough so owners of otherwise perfectly running old Teslas don't just junk them. The Tesla Roadster was not a mass produced vehicle, so the cost of replacing its battery is $40K. The economies of scale of a gigafactory alone will drop battery costs dramatically. Heavy research could drop it further over the next decade or so."
Re:resell value already bad (Score:5, Interesting)
An electric car is pretty much a write off the moment you drive one off the lot.
I suggest you try searching for used Model S prices, before just offering your reasoned-out guess as fact. Year-old vehicles are going for incredibly close to retail. So much so that it doesn't make sense to sell back to Tesla at their Best Resale Value Guarantee [teslamotors.com], which assures that the depreciation is going to be less than equivalent BMW, Audi, Mercedes, Lexus or Jaguar vehicles.
Re:volume (Score:5, Interesting)
Their factory will only "drop battery costs dramatically" if it runs at full capacity. Its capacity is about 500,000 cars per year, while Telsa has only sold 25,000 cars in total.
The factory isn't for Tesla vehicles only. Tesla and Panasonic (the factory is a join venture) intend to supply other electric vehicle manufacturers with cheaper batteries. So the potential market is much greater.
this is why I leased my Leaf (Score:4, Interesting)
Everyone I know gave me tons of shit about leasing a new car. I still think a lease was the right decision.
Others may disagree, but in my opinion until battery prices come down (or the technology has a mega-improvement), electric cars are more of a service than an asset.
My Leaf is amazing. It's like driving a spaceship ... completely silent, smooth as silk, no transmission, acceleration like there's a rocket strapped to your ass ... damn near zero maintenance, and it costs about 1/10th per-mile to drive as opposed to my gas-guzzling "Canyonero" SUV.
IN FACT, the amount of money I USED to spend in a month, just buying gas for my old car, is $80 less than the monthly lease payment on the Leaf (and of course, I knew this going in, which is why I did it).
The battery is by far the most expensive single part of the car. In fact, when you look at it, you're really sort of buying a very expensive battery with some car-shaped accessories. The fact that the battery WILL fail as a matter of scientific certainty, and that we can even know more or less exactly when that will happen, makes me not want to own one of these.
With gas cars, you buy them doing calculations about repair cost and resale value that simply do not apply to the situation with electric cars. It's damn unlikely (unless I get in a wreck) that ANY repairs will ever be needed on my Leaf other than the big one ... the battery will eventually go, and at that point I might as well buy a new car.
Which is why leasing electric cars is the way to go, until the battery technology has a massive improvement, or the cost comes way down ... or some car company figures this out and makes interchangeable batteries with a leasing program for the battery. I'll happily own the car if I don't have to own the battery too!