Cheap batteries will make the Tesla Model S profitable at 20,000 annual deliveries

Tesla Model S

rNews about Tesla Motors stock hasn’t been all that positive as of recently. Shares of the electric-car maker fell more than 15 percent earlier this week as the company’s “lock-up period” expired. Tesla is now hoping to generate some positive press and said today that cheaper batteries will make the upcoming Model S sedan more profitable with much lower sales than Nissan LEAF.

The $57,500 Model S sedan is designed to make money for Tesla at 20,000 annual deliveries, Chief Technology Officer J.B. Straubel said in an interview with Bloomberg. Nissan CEO Carlos Ghosn said that combined electric-car sales for Nissan and affiliate Renault SA may need to reach 500,000 annually to be profitable without any government aid.

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Straubel said that Nissan’s choice of large lithium-ion battery means “they will have a cost challenge that will be more difficult to solve.” Tesla’s battery back may cost as little as $200 per kilowatt hour, compared with $700 to $800 per kilowatt hour for large-form cell lithium-ion packs.

Tesla recently confirmed that more than 3,000 people have reserved a spot to purchase the Model S.

Refresher: The Tesla Model S sedan can be recharged from any 120v, 208v or 240v outlet. Depending on which Model S trim-level you chose, the all-electric sedan will provide you with a total range of 160, 230 or 300 miles per charge. 0 to 60 comes in just 5.6 seconds with a top speed that is limited to 130 mph. Pricing is expected to come in at $49,900 after a federal tax credit of $7,500. A $5,000 reservation fee is required but is refundable.

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– By: Omar Rana

Source: Bloomberg