Tesla Model S Offers a Lesson in Electric-Vehicle Economics
A handful of fully electric Tesla Model S Signature Performance sedans were presented to their owners at the company’s factory on June 22, each priced around $100,000. The luxury sedans were fitted with the most powerful battery pack available from the start-up automaker, rated at 85 kilowatt-hours. In combination with the vehicles’ electric motor and other running gear, those reserves of energy are capable of generating 416 horsepower, Tesla claims.
A Model S with the 85-kWh pack but without the Signature Performance frills would cost $77,400, before tax credits. Smaller packs, with proportionally diminished prices and estimated driving ranges, are scheduled to be offered later this year: a 60-kWh model starting at $67,400 and a 40-kWh model at $57,400, again excluding tax credits.
By setting three distinct benchmarks for performance and price, Tesla offered customers, and the industry, an invitation to engage in some rudimentary calculations to determine the price Tesla placed on each kilowatt-hour of capacity.
Taking the difference between the prices of cars fitted with the 40-kWh and 60-kWh packs, Tesla ostensibly charges $10,000 for 20 kWh of capacity, or $500 per kilowatt-hour.
Because the battery packs are constructed of thousands of smaller batteries, the cost of the battery is expected to escalate as its capacity increases. But the 85-kWh pack offers 25 kWh for $10,000, or $400 per kilowatt-hour.
Of course, equipment levels are part of the Model S equation as well. Tesla expects buyers of the Signature Performance level to pay roughly $20,000 over the basic 85-kWh sedan for features like a performance-goosing inverter, sport-tuned suspension and nappa leather.
In return for the extra dollars and deeper reserves of battery power are extended range and better full-throttle performance. The Environmental Protection Agency recently rated the Model S equipped with the 85-kWh pack at a range of 265 miles, which is about 3.1 miles per kilowatt-hour. That is in keeping with the widely acknowledged capability of lithium-ion battery packs, which deliver about 3 miles per kilowatt-hour in a car weighing slightly more than an equivalent vehicle with an internal-combustion engine.
Consequently, the 60-kWh Model S should offer a range of about 187 miles, and cars with the 40-kWh pack should be capable of about 125 miles.
On its Web site, Tesla more optimistically cites range limits of 300, 230 and 160 miles for the three packs, assuming a constant speed of 55 miles per hour under ideal conditions. Driving in extreme cold can reduce the range of a lithium-ion battery, and any number of factors can erode their performance, be it excessive heat, overcharging or deterioration of the electrolyte.
Battery packs used in E.V.’s have safeguard systems built in that prevent overheating and overcharging, but no device exists that forestalls the march of time. Maximum range, in other words, isn’t a forever proposition.
The hope throughout the industry is for battery prices to decline as the technology matures and manufacturing efficiencies are developed. Tesla declines to cite a price for battery replacement, saying on its Web site that it is “impossible to accurately forecast the cost of future battery replacements.”
To that, one might add that it is impossible to forecast the cost of future electric vehicles.