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NMC, LiFePO, and $3,750 subsidy

Discussion in 'Tesla' started by bwilson4web, Apr 20, 2023.

  1. bwilson4web

    bwilson4web BMW i3 and Model 3

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    The IRA subsidy is reduced on the imported, LiFePO battery, Model 3 Standard Range, by $3,750. Meanwhile, Tesla reports the NMC, 4680 cells are going into the next and higher end Teslas. So this begs the question of would it be cheaper to put NMC, USA cells back in the Model 3?

    Assuming the earlier 55 kWh pack and no adjustment for the weight difference:
    • $3,750 ~= 55 kWh (NMC) - 55 kWh (LiFePO) :: the price difference of Federal subsidy
    • 55 kWh (LiFePO) + $3,750 = 55 kWh (NMC) :: achieving price parity
    • (55 kWh (LiFePO) + $3,750 = 55 kWh (NMC)) / 55 kWh :: relative costs per kWh
    • (LiFePO) + $68.18 = (NMC) :: cost difference per kWh of LiFePO and NMC
    • $68.18 = (NMC) - (LiFePO) :: another way to show price difference
    This suggests if the price per kWh is $68.18 or greater for imported LiFePO, then that is the lowest cost to the buyer given based on current IRA subsidy. But if the cost difference is less than $68.18, converting the Model 3 Standard Range to NMC is the lower cost option.

    I have not tried to model the relative weight of LiFePO versus NMC cells which should be a factor. The heavier weight of LiFePO would require more cells to match the performance of the lighter weight NMC cells. For now, I leave that as an academic exercise.

    I may pose that as a retail investor question for the next quarterly review:
    • What would be the price difference of a NMC pack Model 3 with $3,750 subsidy savings be compared to the existing, imported LiFePO pack without the subsidy?
    Bob Wilson
     
    #1 bwilson4web, Apr 20, 2023
  2. Trollbait

    Trollbait It's a D&D thing

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    The analysis is missing an important factor. Does Tesla have enough N, M, or C to replace the current LFP pack without impacting production levels of other trims and models? Getting the higher subsidy amount for the base Model 3 doesn't help them if it means making fewer cars to sell overall.
     
    #2 Trollbait, Apr 20, 2023
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  3. bwilson4web

    bwilson4web BMW i3 and Model 3

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    Ordinarily I would agree if more than one model was switched to LiFePO. But I think a stronger argument is there is a larger customer base that has no access to USA subsidies.

    I’m curious how much cheaper an LiFePO pack can be that they are inported to the USA where NMC packs had been the standard. For example, my 2019 Model 3 has the 2170 NMC cells.

    Now if the Model 3 came with a 4680, structural pack, I would be pleased.

    Bob Wilson
     
    #3 bwilson4web, Apr 20, 2023
  4. Trollbait

    Trollbait It's a D&D thing

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    I suspect Tesla moving to LFP for the base Model 3 outside of China was done for more than cost. Every base Model 3 with LFP freed up 55+ kWh of NMC cells for other models. Can Tesla ramp up NMC battery production for 60k plus, and growing, of Model 3 RWDs sold in the US to replace the LFP pack without reducing the growing production of their other models? While just one model uses LFP, it has an impact on all the models.

    If supply is not an issue, "In China, the price of LFP cathode active material (CAM) from CATL is 43% less expensive, (per kWh), than their NMC811 material. And considering that the cathode is by far the most expensive component in the battery, this difference in active material cost can have an important impact on the final cost of the battery going into the electric vehicle." https://nickelinstitute.org/blog/2020/june/battle-of-the-batteries-cost-versus-performance/

    The article was from a couple years ago, but playing around with those numbers, it doesn't look like switching to NMC plus additional $3750 credit will lead to a lower consumer cost over sticking with LFP. Assuming a NMC cost of $100/kWh, the net cost reduction is around $500.
     
    #4 Trollbait, Apr 20, 2023
  5. bisco

    bisco cookie crumbler

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    they must have done something, because the standard model 3 and y both qualify for $7,500. until dec. 31.
    i plugged all my info in for a trade in, but was disappointed with the $7,000. offer. kbb says 10-12k.
    still, the 3 nets out at $22k plus ttl, and the y at 32k, (after fed and state 11k rebate) cheaper than anything else out there except bolt, and i'd rather wait until the new (larger) version comes out.

    the weird thing is, used tesla dealers haven't realized that new is cheaper for people who qualify.
     
    #5 bisco, Jul 15, 2023
    Last edited: Jul 15, 2023
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  6. Rmay635703

    Rmay635703 Senior Member

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    Eliminating all need for cobalt should put a good stop against the constant misinformation showing copper mines as cobalt mines and showing
    5 year olds mining cobalt (which is rare, getting rarer)

    Eliminating cobalt from lithium batteries should top Geo-political motivations.
    (Considering it’s one of the few real contaminants in a lion battery)
     
    #6 Rmay635703, Jul 15, 2023
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