Tesla is selling second generation lithium-ion batteries at retail prices that are cheaper than the average manufacturing cost at most companies, setting a pace for the industry that is beating some of the most optimistic of price projections.
According to a new report from Bloomberg New Energy Finance, the Powerwall 2 just “may be the cheapest lithium ion battery for the home ever made” when deliveries of the batteries begin early next year.
“We certainly expect it will move the market prices downwards as we saw last year with the first Powerwall’,” said Yayoi Sekine, a BNEF analyst who covers battery technology.
In Australia, the Powerwall #1 “Tesla effect” was making its mark on battery storage costs as early as June 2015, with prices of competing battery products falling by as much as one-third in just six months.
As reported on RenewEconomy at the time, the 7.2kWh Power Legato system was being offered at around $A14,000, putting it at around $A2,020/kWh. The average pricing in November 2014 had been around $A3,200/kWh.
Basically, BNEF said in June 2015, Tesla’s first round of Powerwalls effected a price cut of around 50 per cent in $A terms. And for the other manufacturers to match that had meant sacrificing “R&D payback” in the first years of deployment.
The fact that Tesla has effectively done this again, not even 12 months after the first Powerwalls hit the market, reveals the kind of downward trajectory battery prices might be on, and the kind of pressure manufacturers will be under to cut costs and keep up with the Musks.
Of course, not everyone will be celebrating the arrival of Powerwall 2. Simon Hackett – the CEO of rival battery maker Redflow – has argued, Tesla’s focus on costs and addition of a built-in inverter could “polarise the market into two camps over time – with a distinct sensibility developing that is akin to the long-term battle of Apple vs Android in the smartphone market.”
© 2016 Solar Choice Pty Ltd
