Tesla Motors Inc (TSLA) Is Going All Out To Reduce Battery Cost

Tesla Motors Inc (NASDAQ:TSLA) has signed an exclusive partnership with Dalhousie University professor Jeff Dahn as the company tries to look for creative ways to lower its battery costs. Dahn is a renowned researcher with vast experience on lithium ion batteries having carried extensive studies on why these batteries fail.

Why Tesla Needs To Lower Battery Costs

Battery costs have always been an enigma for Tesla Motors Inc (NASDAQ:TSLA), making its cars to be relatively expensive. The giant electric company plans to sponsor Mr. Dahn’s research efforts as a way of coming up with solutions that could be used to lower the battery costs.

Financial terms of the research partnership have not yet been disclosed with Mr. Dahn set to join Tesla research team on completion of a project he is currently working on with 3M Co. The automaker has always reiterated that battery costs need to come down so that lower cost vehicles can hit the market for mass market.

Production costs for an 85 kilowatt-hour battery used in Model S vary from between $20, 000 to $25,000. Tesla Motors Inc (NASDAQ:TSLA) chief technologist officer JB Straubel believes battery costs will have to be slashed by more than half if the company has to achieve its sales target of one million plus by 2020.

Research to Target Cost of Materials

Tesla hopes that by leveraging Mr. Dahn’s experience they could come up with the way forward to injecting more voltage into batteries without affecting the longevity of the batteries. The research works will also try to come up with ways to reduce the cost of materials.

Materials make up 60% of battery costs something research works will look into with a view of coming up with alternative materials that are relatively cheap. Dahn’s expertise on silicon anodes should be a great addition as these anodes could be used as an alternative to graphite’s that are relatively expensive.

Tesla Motors Inc (NASDAQ:TSLA) is moving swiftly on the construction of its Gigafactory in Nevada that is expected to produce 50-gigawatt hours of batteries annually on completion.

Viraj Shah

Viraj Shah has completed M.Com (Finance) and is currently pursuing his CFP. He tracks US markets along with other global markets like India very closely. He is very passionate about stocks, real estate, and technology. He also believes that money can always be made in the market.

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