Days after Consumer Reports declared that the Tesla Model S might have been the “best car ever,” Tesla Motors’ stock surged 57 percent. While the stock was soaring, financial services corporation Morgan Stanley notably doubled its price target on the company, from $47 to $103. “What Tesla has accomplished isn’t luck, it’s real,” Morgan Stanley wrote in a note to clients.
Indeed, it isn’t luck. The company has managed to build an electric car that not only goes head to head with the Audis, BMWs, Mercedes, and Porsches of the world, but beats them in an objective test. And that takes some great engineering.
But when all the woo-hooing is finished, a bigger challenge still lies ahead for Tesla and other electric automakers. That’s because Tesla’s formidable accomplishment occurred at an elevated price level, which neatly suits the benefits of a big, expensive electric car battery. ”They didn’t fight the price point,” Jake Fisher, director of auto testing for Consumer Reports, told Design News. “They simply said, ‘Let’s make the best car.’ ”
Unfortunately, a $90,000 car with an 85-kWh battery makes more sense for luxury buyers than it does for the larger swath of mainstream consumers. ”Clearly, you need another car if you want to take a long trip,” Fisher told us. “Or you need to rent a car, which is an inconvenience. But most people who buy $90,000 cars have more than one vehicle in the family.”
For most consumers, however, car buying is more a matter of pragmatism. They need cars to get them to work, to the grocery store, or to grandma’s house. Less frequently, they need a vehicle to drive the kids to college or take the family on vacation. Most potential buyers don’t want to rent a car every time they need to take a 100-mile roundtrip. Nor do they want to pay $90,000 so they can take a 200-mile roundtrip.
Amidst the euphoria over the Model S’s wonderful reviews, there’s a thread of thinking that says Tesla’s accomplishments will trickle down. In other words, the 200-mile range of the Model S will soon be available in a $50,000 car, then in a $30,000 car, then in a $20,000 car. That’s the way it worked for such features as electronic stability control and navigation. It might also have been what Elon Musk was thinking when he boldly predicted last year that half of all cars on the road would be pure electric in 15 years.
As we’ve said many times, however, the successes of electronics don’t apply to battery chemistry. There is no Moore’s Law for chemical storage. Moore’s Law is about manufacturing -- pushing the state of the art by reducing the feature sizes of microelectronic devices. Batteries, on the other hand, pose a science challenge. Making them better is more like curing cancer.
That’s not to say we won’t get there. To date, however, it has never happened as fast as the optimists predicted. You can look back at any newspaper, any magazine (including Design News), over the last 20 years and find scads of articles that predicted some new battery chemistry would be ready to power electric cars in five years. But, too often, the well-meaning claims dissolved into a tale of technical and economic woe after those five years passed. Meanwhile, the standby chemistries (lithium-ion and nickel-metal hydride, for example) were inching along with slow, hard-earned gains.
Like it or not, we‘re going to continue to need those gains. To appeal to the mainstream of the automotive market, EV makers will need better batteries. They’ll have to find batteries that balance energy and cost in just the right way. The question is whether the twitching investors who are now anxiously jumping aboard the Tesla bandwagon will have the patience to see the plan come to fruition.
In that sense, not much has changed. The truth is, it’s still about the battery.
At that price tag, it might as well still be a concept car.
I'm not sure I buy the trickle-down theory for technology in this case either. There isn't a revolutionary technology in the car this time (unlike the examples given in the article). There isn't anything to trickle down.
I like the idea of battery swapping, but that is going to require industry to settle on a standard.
It's to their advantage to do so, but in recent history getting companies to do so turns into a brand-name battle.
The article mentioned that battery technology is not growing as fast as computing performance in the electronics industry. It would be interesting to see the slope of the battery performance curve and the projections of when predicted battery performance would become economically feasible compared with existing fossil fuel technology.
Being able to compete with serious cars like Mercedes, BMW and Audi is certainly an impressive feat for Tesla S. Unfortunately, the chemistry behind all of it is still lacking behind the technology which powers the whole thing, like others have eloquently put in this blog post.
Good point about the history, naperlou. Over the past 25 years, virtually every promise has been overstated and broken. If we want, we can take the history all the way back to November, 1911, when The New York Times published an article saying that the battery was here and the electric car was about to make a comeback. What's the old saying about ignoring history? Those who ignore it are bound to repeat it?
200 mile battery in a $20k car, I would buy it instantly. When will this happen?
As battery materials become more scares, will prices really drop? It seems like battery tech is going the way of gasoline. A commodity with price fluctuation. At least the materials use in the battery are..
Chuck, good article and good points. The battery chemistry problem is one that will be with us for a long time. It may not be solvable in a device we would recognize as a battery.
I like that you brought up the history of this thing as well. I have looked at the old magazines myself, and there are some other ideas that might be necessary to solve this problem. First, though, we have to understand that no new technology will be adopted unless it fills the need and is as convenient as the one it replaces. Think about what that entails when you are planning to replace liquid gasoline. If my car runs out of fuel I can walk to a gas station, fill a gallon container and then walk back and get going again. A can that is light enough to be carried by just about anyone will get me from 10 to 40 miles. The station where I fill that can (or my vehicle) up is relatively low tech. Now consider charging stations. The ones that can charge your electric vehicle quickly are realtively expensive. You still need to spend some time there. And they have to be just about everywhere.
One concept we see occasionally, and the is very old, is the quick replace station. That is, the battery would be replaced at a "filling station". This concept was developed when NiMH was the battery technology. The battery in the Tesla cars costs $40K and weighs about 900 pounds. This is not something you could easily replace. The cost and liability problems are not really solvable with current technology.
Frankly, I don't see Tesla being able to move to their mass market target unless they can move the technology needle on energy storage. Who knows?
For industrial control applications, or even a simple assembly line, that machine can go almost 24/7 without a break. But what happens when the task is a little more complex? That’s where the “smart” machine would come in. The smart machine is one that has some simple (or complex in some cases) processing capability to be able to adapt to changing conditions. Such machines are suited for a host of applications, including automotive, aerospace, defense, medical, computers and electronics, telecommunications, consumer goods, and so on. This discussion will examine what’s possible with smart machines, and what tradeoffs need to be made to implement such a solution.