Posted on February 29, 2016 by Matt Pressman
This past week, Tesla Motors Co-Founder and CTO announced: “Basically every single part of that electric vehicle ecosystem [cost structure] is dropping substantially," and explained that battery costs continue to decline. And according to Valuewalk*, "Goldman Sachs analyst Patrick Archambault and team issued a report ... at Tesla’s factory in Fremont, Calif. where they met with CEO Elon Musk, Autopilot Director Sterling Anderson and CFO Jason Wheeler." Their findings were fascinating with unique insights into battery price reductions, vertical integration, and self-driving technology.
Goldman Sachs reported on changes at the Tesla factory: "They report that the factory has changed a lot since they visited the last time over a year ago. For example, they said the automaker has grown into the space it has and now is more fully utilizing it. In fact, they expect future expansions will result in non-assembly functions being moved to satellite facilities... The automaker is running about an 80% vertically integrated operation."
Source: In Auto News
Goldman also reports progress on Tesla Model X production: "there are Model Xs coming down the assembly line 'interspersed with Model S vehicles.' They added that the body shop... [is] doing what they call 'burst builds,' which involves assembling a group of the SUVs and then inspect them fully at various stages throughout assembly."
Source: Tesla Motors
Battery technology and pricing improvements were also reported: "Also on their manufacturing tour, [Goldman Sachs analyst] Archambault and team found that Tesla continues to improve its battery cells in density, safety and duration, with some tests checking for more than 1,000 cycles to improve duration. They noted that although the automaker doesn’t specifically outline exact costs, representatives said $200 per kilowatt-hour is about where they are right now, and they’re targeting less than $100 per kilowatt-hour per pack."
Regarding self-driving technology: "In their meeting with Musk and Anderson, they discussed technological developments, and one of the big topics lately has been autonomous driving. Tesla, Google and others are in a race to be the first to roll out fully autonomous vehicles, and Musk told the Goldman analysts that he has become skeptical that machine learning and Deep Neural Networks will be able to handle some of the harder problems with artificial intelligence. Autonomous vehicles will have to solve problems with 99.999% accuracy to be viable in the mass market, and he said that machine learning can reach 80% or 90% accuracy."