10/23/2014 | 1 MINUTE READ

Study Questions Cost-Cutting Ability of Mega-Battery Factories

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Tesla's gigafactory plan Economies of scale for factories that make lithium-ion batteries for electric cars plateau at about 300 megawatt-hours per year, asserts an analysis by Carnegie Mellon University and the Massachusetts Institute of Technology.

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Tesla's gigafactory plan

Economies of scale for factories that make lithium-ion batteries for electric cars plateau at about 300 megawatt-hours per year, asserts an analysis by Carnegie Mellon University and the Massachusetts Institute of Technology.

Beyond that volume, which is about equal to the amount of batteries produced last year for the Nissan Leaf or Chevrolet Volt, higher output won't do much to cut cost, the researchers say.

The conclusion challenges the assumption of Tesla Motors Inc. that the 35-GWh factory it is building in Nevada will be able to slash current battery prices 30% through ultra-high output. The researchers present their case in the Journal of Power Sources.

Their study doesn't specifically analyze the "18650" cell format Tesla uses. Instead, its calculations are based on the prismatic cell design employed in virtually all other EV and plug-in vehicles today.

Still, the CMU-MIT team opines that economy of scale results for Tesla's batteries should be about the same. The researchers say investing in more efficient battery technologies might achieve better results than subsidizing EV sales to boost volume.

The analysis notes that the performance, efficiency and cost of lithium-ion batteries varies by at least a factor of two depending upon their chemistry and intended application. Thus it cautions that earlier economic studies that assume a single cost per kilowatt-hour are limited.

The CMU-MIT researchers created an optimization model to find the least-expensive battery pack design for several energy and power needs. Then it calculated the effect of economies of scale for each one. It found relatively low plateaus across a wide range of battery architectures.

The price of batteries is the single largest economic barrier to widespread use of EVs, the team notes. But it concludes that "large factories alone aren't likely to solve the battery cost problem."