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Summary:

While Nissan has made bold claims about the battery pack for its LEAF — that it’s broken the $400/kWh mark at a time when other automakers are shooting closer to $500-$700/kWh — Tesla Motors CEO Elon Musk isn’t worried. He says the LEAF’s battery is primitive.

Nissan has made some bold claims in recent months about the battery pack for its upcoming LEAF electric sedan — namely, that it had broken the $400/kWh mark at a time when other automakers were boasting about lithium-ion batteries edging closer to $500-$700/kWh for future models. However, Tesla Motors CEO Elon Musk, for one, isn’t worried about getting schooled by Nissan in the battery game.

In a call with shareholders and analysts on Wednesday, Musk slammed Nissan’s battery technology and said Tesla does not believe the Japanese automaker will beat the company on cost-per-kWh.

Asked during Wednesday’s call whether Tesla is seeing competitors, and specifically Nissan, drop their battery costs faster than anticipated, Musk commented that the LEAF battery pack uses a “much more primitive level of technology” compared with the sophistication of even Tesla’s first prototype.

This comes down mainly to the thermal management system, or the technology used to keep the battery within a healthy temperature range. Tesla uses what Musk described as active liquid thermal control, while the LEAF pack uses an air cooling system. As a result, the LEAF pack will have temperatures “all over the place,” causing it to suffer “huge degradation” in cold environments and basically “shut off” in hot environments, claimed Musk. Liquid cooling systems (General Motors’ choice for the Volt battery pack) can be more complicated, but also more compact than air cooling systems.

Tesla needs to take some big bites out of the battery costs for the planned Model S sedan, which the company is betting will be its ticket to profitability. According to Musk, battery costs for the $57,400 Model S are on track to be 40 percent less than those for the first version of the $109,000 Roadster, which launched back in 2008 with a belly full of 6,831 battery cells similar to those used in laptops.

In Tesla’s system, liquid coolant is pumped through the pack, which is equipped with sensors that can be monitored by the car’s firmware. The more cells you have in a battery pack, the more difficult it is to manage the power flowing through them, as Motiv Power Systems CEO Jim Castelaz has explained. It’s a “super-linear” relationship, with 200 cells generally being more than twice as difficult to manage as 100 cells.

For Tesla, Musk said battery savings will stem in large part from the shift to a nickel cobalt aluminum cathode (positive electrode) for the Model S, rather than the cobalt cathode for the Roadster. Cobalt is the “most expensive ingredient” in the battery pack, said Musk, and the Model S pack will use only a third of what’s needed for the higher end Roadster. In addition, Musk said that the company’s targeting a 50 percent increase in density at the module level (fitting more lithium-ion cells into each module in the battery pack).

The Model S will still use laptop-sized battery cells (and lots of ‘em), engineered for automotive use, Musk said. (Toyota has said it’s particularly interested in evaluating the potential benefits of Tesla’s battery pack design as an alternative to larger cells and fewer of them, through the companies’ work on an electric RAV4 prototype.)

As Nissan gears up to launch its LEAF (with an 8-year, 100,000-mile battery warranty) later this year, however, Tesla still has a long way to go on the Model S project and its road to profitability. Musk said Tesla expects to spend roughly $400 million over the next 2.5 years, out of a total $500 million program for the Model S. The company’s aiming to complete an “Alpha” prototype toward the end of this year, with about 80-90 percent of the model considered “production intent,” and then a “Beta” prototype with small tweaks bringing the car up to 99 percent production intent.

While demonstration units won’t roll into Tesla’s stores until the second half of next year, the company has now collected more than 2,800 reservations for the car, said Musk, up from 2,600 at the end of June. Each of those reservations requires a minimum $5,000 refundable deposit, so these early hand-raisers are likely serious about buying the car. But the reservation figures won’t really say much about demand for the model until next year, the company said, when its sales team will “start to push advance orders.”

Tesla Chief Financial Officer Deepak Ahuja noted during Wednesday’s call that Tesla has increased its margins on the Roadster over the last 12 months, but Lux Research analyst Jacob Grose commented those margins may still be alarmingly slim for a company that aims to eventually produce a $30,000 electric vehicle. “Since Tesla’s only product right now is a $100,000-plus Roadster, which in theory should be a high margin vehicle (it’s not),” Grose said Tesla’s net losses “raise a serious question of whether Tesla has the operational discipline to succeed in its eventual goal of producing an EV in the $30,000 range.”

That said, Tesla’s executives emphasized that the company is in an aggressive expansion phase. Without those expansion efforts, Ahuja said the company could be “right sized” to deliver a net profit based on a gross margin “in the range of 20 percent.” In exchange for “pretty astronomical growth,” said Musk, the company is “giving up” the possibility of a profitable enterprise today.

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  1. Nissan has built and sold cars at a global scale that allows ongoing profits and a viable business. GM and others are not fooling around anymore. Tesla has done none of these things. Is Musk believable? Tesla needs to deliver a product beyond this gimmick and prove they can compete, and do it very, very soon. There is no viable EV market today, all about a product that works and builds forward. Screw it up now, and Tesla is toast. (Like Better Place which already is toast)

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  2. Nissan will sell 50x more EVs in their first year than Tesla have in their entire history, sounds like EV envy to me.

    Who stands behind their product more? Tesla offer 3-year, 36,000-mile warranty while Nissan offer 8-year, 100,000-mile. End-of-story!

    Elon Musk showing his ignorant disrespect and trying to convince the world that he’s smarter than all Nissan’s engineers combined doesn’t turn Tesla loss’ into profit any sooner!

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  3. Kevin Phillips Thursday, August 5, 2010

    Having a battery system composed of some 6,000 2,100ma cells ?

    thats advanced technology? The Tesla pack is old school.
    Fewer cells, less connections and cell level sensors.
    Simple is better larger format ~100ah cells much easier to manufacture, manage by BMS and to service if a cell fails

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  4. “Our battery requires complex liquid cooling, so it is better”. Anyone with an inkling of engineering their blood will laugh at this. But this was a call with financial analysists and apparently noone challenged.

    BTW, why does Tesla’s superior battery carry 3 year warranty and Nissan’s 8 year warranty ?

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  5. @Rob

    curious to hear why better place is already toast. care to explain?

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  6. impulse power Thursday, August 5, 2010

    yeah, Tesla says this but they make sure price of their current vehicle goes to rich actors and other ceo’s like himself can buy the impractical 2 seater for 1 person and his dog, the 4ds coming out is outrageously expensive also for the average family. I could agree that maybe the battery is not as good but cost of vehicle with calif/fed incentive makes it attractive. Nissan will outsell even with limited range and the batteries are retractable so in a few years they will have a better cell without turning the car in.

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  7. If Tesla’s battery is so much better than the leafs why do they only offer a 3 year warrany when Nissan will have a 8 year 100,000 warranty on the leaf battery pack?

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  8. Ye but who else is doing

    1) 250 – 300 mile range
    2) cars that look so fine the fact that they’re electric is an afterthought.

    The US needs Tesla to succeed here so roll out the red carpet

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  9. It’s amazing how this idiot Elan Musk makes people belief that his concept of putting over 6800 cells together in a battery pack can be successful. The only reason for them doling that, is safety. If a small 18650 blows up in the pack the event may not propagate within the pack. If a large 20 Ah cell blows up, the whole battery pack may blow up. So, managing large cells in the pack and operate them safely is the real challenge. Putting 6800 18650 cells together is primitive!

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  10. [...] (Source:  Earth2tech) [...]

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  11. [...] "huge degradation" in cold environments and basically "shut off" in hot environments, according to Earth2Tech. Tesla's battery has a more sophisticated/complicated cooling system than the air-cooled system [...]

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  12. [...] they know what they’re doing, and the proof will be in driveways soon enough. [Source: Earth2Tech] First Drive: 2011 Nissan Leaf doesn’t change the game, just the playersNissan’s Electric [...]

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  13. Elon Musk forgot to point the biggest difference between his cells and Nissan’s. The Tesla roadster uses consumer cells (computer’s batteries), which are conceived to operate at room temperature. So they need very precise temperature control. On the other hand, Nissan has developed automotive-grade lithium cells, which can operate on a much broader range of temperatures.

    As the warranty shows, Nissan’s batteries will also be much more reliable, and longer-lasting, because they are tougher. It’s only normal, an automotive part is more robust than a computer part.

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  14. Hi-Capacity Li-Ion Laptop Battery for Presario 2100 & 2500 series (F4812A)…

    I found your entry interesting thus I’ve added a Trackback to it on my weblog :)…

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  15. I would have to agree with Musk…3x the range and brought to the market 2 years ago. Also at the time that seemed like a fair warranty considering what the warranty is when buying cells on the retail market.
    Tesla could have taken the easy simple cheaper way with bigger cells but could not get the performance needed. I have not hear of anyone who owns a roadster saying it is a gimmick. Daimler and Toyota don’t easily give away their money.

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  16. [...] Even though Nissan is supremely confident in the ability of its battery pack, Musk said it was a “much more primitive level of technology” than even Tesla’s first prototype. Musk also said that the Leaf pack will have temperatures “all over the place” that will cause it to suffer “huge degradation” in cold environments and basically “shut off” in hot environments, according to Earth2Tech. [...]

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  17. [...] Even though Nissan is supremely confident in the ability of its battery pack, Musk said it was a “much more primitive level of technology” than even Tesla’s first prototype. Musk also said that the Leaf pack will have temperatures “all over the place” that will cause it to suffer “huge degradation” in cold environments and basically “shut off” in hot environments, according to Earth2Tech. [...]

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  18. [...] "huge degradation" in cold environments and basically "shut off" in hot environments, according to Earth2Tech. Tesla's battery has a more sophisticated/complicated cooling system than the air-cooled system [...]

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  19. [...] "huge degradation" in cold environments and basically "shut off" in hot environments, according to Earth2Tech. Tesla's battery has a more sophisticated/complicated cooling system than the air-cooled system [...]

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  20. [...] in cold environments and basically “shut off” in hot environments, according to Earth2Tech.Tesla’s battery has a more sophisticated/complicated cooling system than the air-cooled [...]

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  21. [...] Even though Nissan is supremely confident in the ability of its battery pack, Musk said it was a “much more primitive level of technology” than even Tesla’s first prototype. Musk also said that the Leaf pack will have temperatures “all over the place” that will cause it to suffer “huge degradation” in cold environments and basically “shut off” in hot environments, according to Earth2Tech. [...]

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  22. [...] come true, the Japanese company will cover repairs and even replace the whole assembly.Source: Earth2Tech via AutoblogShare Email Bookmark Print Digg Reddit More If you want to know every time we post [...]

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  23. [...] If there’s ever going to be a green-car cage match, we can guarantee that one of the fighters will be Tesla Motors CEO Elon Musk, who apparently can’t pass up the chance to take on any competitor. His latest target? The lithium-ion battery pack in the Nissan Leaf, about which Musk had some critical things to say in a conference call with investors this week. Even though Nissan is supremely confident in the ability of its battery pack, Musk said it was a “much more primitive level of technology” than even Tesla’s first prototype. Musk also said that the Leaf pack will have temperatures “all over the place” that will cause it to suffer “huge degradation” in cold environments and basically “shut off” in hot environments, according to Earth2Tech. [...]

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  24. [...] Intr-o conferinta cu actionarii, Musk a spus ca principalele probleme pe care le-a indentificat la primul automobil electric al Nissan, Leaf, sunt legate de managementul bateriilor, acesta fiind mai primitiv decat cel folosit de primele prototipuri Tesla, in urma cu cativa ani, relateaza earth2tech.com. [...]

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  25. [...] the Nissan Leaf battery in a conference call with investors, according to Autoblog, sourced from Earth2Tech.Saying that the Nissan Leaf battery has a “much more primitive level of technology” than even [...]

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  26. [...] [...]

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  27. [...] and not even up to the technology used in Tesla’s first prototype. Musk’s comments, quoted from Earth2Tech by Autoblog, were made in a conference call with analysts and investors last Wednesday, where Tesla [...]

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  28. [...] Even though Nissan is supremely confident in the ability of its battery pack, Musk said it was a “much more primitive level of technology” than even Tesla’s first prototype. Musk also said that the Leaf pack will have temperatures “all over the place” that will cause it to suffer “huge degradation” in cold environments and basically “shut off” in hot environments, according to Earth2Tech. [...]

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  29. [...] the media onslaught, then fired back by calling the Nissan LEAF’s battery technology “primitive“, and claimed that he was “proving Tesla’s critics wrong” because he [...]

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  30. We work closely with Nissan on charging infrastructure and believe their battery is simply amazing. Our experience is that the vast majority of battery failures are due to connection issues and Tesla with its connecting of thousands of small cell construction is certainly fraught with risk versus the Nissan/NEC construction. Time will tell but we are more comfortable, after close to 20 years experience in electric vehicles, with the Nissan platform. We would welcome having Tesla make cars available for advanced testing, and having Tesla join in open dialogue with on their batteries and charging ability and systems. Thus far Tesla has avoided working with industry standard charging, and will not evan adapt charge standards. Come in from the cold and work with the industry. Elon, prove us wrong and I will concede gracefully and publically.

    Jonathan Read
    CEO Ecotality Inc.
    BLINK Charging Network

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  31. If they have such a great idea, our out-of-control government wouldn’t have had to invest in them.
    Tesla $465 MILLION
    Fisker $5xx MILLION (a company that has never sold a car).
    This will be one of hundreds of total wastes of money the history books will write about from 2008-2012.
    Neither company has a viable product, or feasible business model.
    Example: Tesla model S for $57,000 with a $40,000 battery pack ????????????????????????????????????????????????????
    Do the numbers: they’ll need 100kw-hr to push that lard arse around X $800/kw-hr. ALL MORONS with keys to the bank.
    TIME FOR A NEW GOVERNMENT – before we’re all bankrupt.

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  32. Man, the curmudgeons are out in force here.
    So what that the battery is composed of 6800 cells?
    An integrated circuit can contain 1 million transistors per square mm – and people consider than a good thing, y’know?

    Another consideration, with only a 100 mile range per charge for the leaf, I hope you don’t plan on going very far for vacation…or after work.

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  33. That the Tesla has nearly 7 thousand 18650 Lithium cells is not a result of deliberately designing the best possible battery. It’s due to the fact that Tesla’s predecessor, the T-Zero, was conceived and designed at a time when no suitable large-format cells were reasonably available. So they went with the form factor that was being produced by the millions for laptop computers — taking advantage of the commodity nature. Designing a viable pack around that technology was an amazing feat. But not particularly elegant. Per the ex-founder’s experience with his Roadster, the pack uses the equivalent power draw of 2 refrigerators just to circulate coolant, WHEN THE CAR IS PARKED, until state of chage falls below 50%. So much for efficiency.

    Fast-forward and now Nissan is reaping the benefits of nearly 20 years of research on purpose-built Lithium automotive traction batteries. Tesla’s advantage was that they were way out ahead of everyone else. That advantage is about to evaporate.

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  34. i think you could almost compare the battery pack to a computer processor. millions of little transistors that work best as part of a managed system.

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  35. Nissan SUCKS!
    Their (filthy) company are useless & stupid.
    Nissan are scum, morons & gangster assholes. (Their dumb & brainless drivers, fans, etc are sore losers)
    All their (crap) vehicles are all shit, rubbish, garbage & all dump.
    Their (needless & unnecessary) companies must be removed from this face of this planet.
    Anyway Nissan (forever) SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS, SUCKS & SUCKS!

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  36. Lets not forget one very important thing about using small
    cells versus large cells. Small cells have a heck of a lot of wasted space. Circles don’t fit into square shapes very efficiently at all. Tubes in cubes equals much air space. A large cell is just that, high density in a small area. Thus enabling a lower center of gravity. Not to mention a much smaller overall size for the same A/H. One more thing, a whole lot less connections equals less labor.
    In the end one large cell will prove best.

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