Will The Tesla Model 3 Reduce Battery Prices?

BY Cameron Newland
Tesla Model 3

Lithium-ion batteries power all sorts of electric vehicles, including cars, bikes and skateboards. Historically, the price of lithium batteries has fallen about 7% per year, so it’s only a matter of time until the necessary scale is achieved to make electric vehicles cost-competitive with internal combustion vehicles.

That time is fast approaching.

Tesla Motors has grand plans to increase lithium battery production at its new Gigafactory in Nevada, which is set to produce more lithium batteries than all the rest of the world’s battery factories combined. This will give Tesla a cost advantage as well as a supply advantage that no other manufacturer will be able to match.

So will all this new battery production decrease prices for lithium cells, and will that trickle-down to users of other electric vehicles like electric bikes and electric skateboards? Most likely, it will. The only hitch is that Tesla’s batteries will only be used in Tesla vehicles and Tesla Powerwall home battery arrays, so production increases will have to occur at Panasonic, LG Chem, Sanyo, Sony, and Samsung in order to see prices fall for non-automotive uses.

Tesla Model 3 Photos