Also, what is the environmental impact of the manufacture of LI batteries at this scale? Lithium mining, processing, assembly, delivery... we can't just ignore that.
Strangely, all of these issues were conveniently left out of the article.
Not sure everybody knows this, but its not economically feasible to recycle these batteries:
"Recycled lithium is as much as five times the cost of lithium produced from the least costly brine based process. It is not competitive for recycling companies to extract lithium from slag, or competitive for the OEMs to buy at higher price points from recycling companies. "
Add in the fact there are currently very few dedicated LI recycling companies in the world, let alone in the US:
"With lithium recycling in its infancy, there is currently no main recycling infrastructure in the world that treats only automotive Li-ion batteries. A few pilot plants, such as Umicore's Hoboken plant in Belgium that are at a demonstration stage exist. Lack of standardisation in battery chemistries and changing landscape with respect to different elements under research for battery production other than lithium have made evaluation of the recycled value of the components uncertain for the recyclers."
source: http://www.waste-management-world.com/articles/print/volume-...
Call me skeptical, but I'm not sure Tesla has really given consideration to these issues. Their approach to these obvious issues are not addressed at all in their press release.
Why am I telling you all of this? Because the price of something has very, very, very, very, very little to do with how feasible something is, how much work is required on a fundamental level.
So what? Recycling lithium isn't profitable right now this very instant? Because the price is too high? Apart from the circular logic here, this means nothing.
(This kind of thinking is disappointingly common here. We will never get anywhere when we do some adhoc "price" analysis on every new technology and obviously deduce it's infeasible and should not be explored. Cars were economically infeasible back when you bought petrol from the pharmacy.)
the lithium, although lithium is sometimes thought of as a bigger thing than it really is for lithium ion cell.
It’s like using maybe a couple percent of the cell mass, but the biggest cost constituent is nickel
There's a great analysis of material constraints here [1].
1. http://seekingalpha.com/article/654441-ev-myths-and-realitie...
But lithium is still not cheap. I suppose that a different battery technology, with lower energy density per unit of weight, could be much cheaper with comparable efficiency. But Tesla only has expertise in lithium batteries, so some other manufacturer could use the momentum with a lower-cost offer.
Lithium is extremely cheap. The cost of the Lithium has practically no impact on the cost of the batteries. Most of the cost of batteries is work.
This venture makes sense because as lithium batteries are used, they lose capacity, and thus their specific energy gets worse. At this point, they are no longer very useful for cars, yet still can be used for other things. As Tesla recovers the used batteries from their cars, they can resell them as home batteries.
The cost of the raw lithium is about 1% of the cost of the battery. It's engineering it in a very precise way that's expensive.
In any case, they wouldn't need to subsidize these batteries. $350/kWh is a pretty decent price, and consistent with estimates of what they cost in Tesla's cars.