Another Hit Piece on Cybertruck

[Ogre]

what all, in your view, does that assume about the battery technologies required for this to become true?

put differently, based on only present technologies, won’t demand for batter-related materials result in potentially exponential price increases as demand for EVs increases?

in which case avoiding that cost curve seems to assume certain technological advances that reduce the demand pressures on a finite resource

I’m just not familiar with what hypotheticals are implicated by a view that finite battery resources won’t also become more expensive over time

Because we’re just babies at this.

Wright's law and the discovery of the learning curve effect
This was later more generalized to: the more times a task has been performed, the less time is required on each subsequent iteration. This relationship was probably first quantified in the industrial setting in 1936 by Theodore Paul Wright, an engineer at Curtiss-Wright in the United States.[5] Wright found that every time total aircraft production doubled, the required labor time for a new aircraft fell by 20%. This has become known as "Wright's law". Studies in other industries have yielded different percentage values (ranging from only a couple of percent up to 30%), but in most cases, the value in each industry was a constant percentage and did not vary at different scales of operation. The learning curve model posits that for each doubling of the total quantity of items produced, costs decrease by a fixed proportion. Generally, the production of any good or service shows the learning curve or experience curve effect. Each time cumulative volume doubles, value-added costs (including administration, marketing, distribution, and manufacturing) fall by a constant percentage.

PS: He’s not one of those Wrights.

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[JBee]

But that's ridiculous. Most EVs currently are luxury cars. But most cars sold aren't luxury cars.

Do you really think that will remain true as carmakers are required to sell more of them?

-Crissa

I think you might have to take off those slotted USA sunglasses you used at Burningman as they are biasing your perception of reality. Most global EV's are not luxury...but I suppose that depends on what you think luxury is.

 

[cvalue13]

Because we’re just babies at this.

We were similar babies at ICE vehicles only 100 years ago, and Wright’s law applied to that industry equally, so obviously Wright’s law has its limitations based on applicable facts.

Simply saying a thing is new, and that Wright’s law exists, does not seem entail any particular, self-evident, outcome.

Though I appreciate that if you have some deeper, lengthier, view you don’t owe it to me, least of all here, and so I take your response to be instead a rather succinct, and understandable, punt.

 

[Ogre]

We were similar babies at ICE vehicles only 100 years ago, and Wright’s law applied to that industry equally, so obviously Wright’s law has its limitations based on applicable facts.

Simply saying a thing is new, and that Wright’s law exists, does not seem entail any particular, self-evident, outcome.

Though I appreciate that if you have some deeper, lengthier, view you don’t owe it to me, least of all here, and so I take your response to be instead a rather succinct, and understandable, punt.

You are missing the point entirely. You should re-read what is there.

The cost of manufacturing ICE vehicles has had 100 years and billions of units of improvement. EVs have 10 years and about 5 million units total produces. The cost to manufacture EVs is coming down massively. More important, the cost to manufacture batteries is going to continue coming down massively. Battery costs are down 10x in the last 10 years and Tesla is pushing them down massively again.

Price on batteries will continue going down as the number of units increases. Efficiency will improve and the combination of source materials will continue to diversify. You seem to theorize prices are going to hit some magical wall, eventually we will, but we aren’t even close.

‘This is Goldman Sacks. Don’t always agree with them, but they sum up the march of prices down nicely.

"Tesla’s automotive cost of goods sold per vehicle fell to about $36,000 in 2021 from over $70,000 in 2017. While this metric increased in the second quarter driven by factory shutdowns, factory start-up costs, and input cost pressure, cost of goods sold per car can trend lower over time as Tesla benefits from the ramp of the Berlin and Austin factories (and the reduced percentage of vehicles coming from Fremont, which is a converted ICE factory with higher costs than Tesla’s purpose-built EV factories), scale, and vehicle platform and battery improvements."​

​

Thats a 50% reduction in cost of goods sold over a 4 year period. The 4680 cell change by itself is likely to reduce COGS on the Model Y by another $3,000+ In the next couple of years.

Tesla has been benefitting from Wrights law. The idea that it’s going to stop arbitrarily now is silly.

 

[Ogre]

Also… absolutely massive investment in new production infrastructure to reduce costs.

 

[JBee]

Well to be honest I'm more concerned with the wafer shortages and if China makes a move to Taiwan, then we'll be in big doodoo on the manufacturing front with cascading failure throughout industries. Those semi conductor foundries can't come fast enough IMHO.

But Tesla wanting to enter the lithium refinery space, and probably even the mining sector is telling how they think the current suppliers can't keep up. EM even said that a few time, but it seems not enough people are taking to a "sure thing".

 

[charliemagpie]

China needs the west too. It would also create its own demons to contend with, security within would be disaster for a generation.

The overbearing reality that I see, is the people of China enjoy their prosperity. They too would not want that threatened.

 

[Dids]

China needs the west too. It would also create its own demons to contend with, security within would be disaster for a generation.

The overbearing reality that I see, is the people of China enjoy their prosperity. They too would not want that threatened.

China is unlikely to invade Taiwan, historically China is inward facing and protectionist, it is a resource poor country, it is politically and economically unstable , so I could not agree with you more.

 

[cvalue13]

You are missing the point entirely. You should re-read what is there.

With all due respect, I was not missing the point - but you may have been missing mine?

The remainder of your post, regarding bringing down the price of constructing batteries, to me seems to assume a broader background fact: abundance and stable pricing of raw materials or other buildingblock technologies required to produce infinitely more BEV vehicles for personal use:

Price on batteries will continue going down as the number of units increases.

This can only be true, it seems to me, if one assumes adequate available natural or other resources.

For example, the ‘Experience Curve’ is famous for also predicting semiconductor advances for decades. That model, however, is unrelated to the global semiconductor supply chain and raw material bottlenecks seen from 2020 forward. That is just a glimpse-example at how the experience curve can stutter.

The experience curve does not maintain that a given technology will continue to prosper, and instead the curve can come to an abrupt stop for numerous reasons, requiring all new curves to begin. Just one of several such abrupt stops involves when supplies (not experience) become the cost-driver of the product.

As these batteries seem more natural resource intensive than even semiconductors, and as these vehicles seem increasingly more sub-technology dependent than ICE vehicles (and so possibly more prone to other technology scarcity events), it’s not as apparent to me that exponential increases in units being produced ensures reduced costs over any meaningful timeline.

It’s also not apparent to me that it’s not the case. Which spurred a question, rather than any critique.

Though to be fair to your point and back on topic, you mentioned a timeline only 10 years out and so limited to a time scale that surely predates BEV adoption that puts a material strain on natural resource costs, etc.
Anyhow, none of this was intended as critique but instead just question.

 

[JBee]

China needs the west too

Not as much as we in the West need China it seems. Trade deficits are telling, Australia has next to no manufacturing capablity anymore. Without wafers everyone in the West is stuffed. Australia has its own perspectives of course, we're also of interest if Indonesia doesn't come first, 100,000 ferrys and largest southeast army. The whole cancellation of the French submarine deal and taking on the US/UK nuclear powered subs instead was a deterrent move, there's no doubting that. It's handy to have a platform that can also launch nukes if we need too.

Australia barely has a soldier for every mile of coastline. We're like a smorgasbord of resources and our borders have been protected by others since our foundation through the empire and then commonwealth. Now that our head of state died today there will be renewed call to make Australia a Republic, and with it will go our last percievable defence. Europe is busy, USA is fighting itself more than anyone else willst being invaded by southern parts of the Americas, who's left on the world stage to play policeman, especially now after pandemics and co where everyone is still in recovery?

Hey at least it will get all them darn doll bludgers off me beach! Time to learn Mandarin mate. Lol

 

[JBee]

[

With all due respect, I was not missing the point - but you may have been missing mine?

The remainder of your post, regarding bringing down the price of constructing batteries, to me seems to assume a broader background fact: abundance and stable pricing of raw materials or other buildingblock technologies required to produce infinitely more BEV vehicles for personal use:



This can only be true, it seems to me, if one assumes adequate available natural or other resources.

For example, the ‘Experience Curve’ is famous for also predicting semiconductor advances for decades. That model, however, is unrelated to the global semiconductor supply chain and raw material bottlenecks seen from 2020 forward. That is just a glimpse-example at how the experience curve can stutter.

The experience curve does not maintain that a given technology will continue to prosper, and instead the curve can come to an abrupt stop for numerous reasons, requiring all new curves to begin. Just one of several such abrupt stops involves when supplies (not experience) become the cost-driver of the product.

As these batteries seem more natural resource intensive than even semiconductors, and as these vehicles seem increasingly more sub-technology dependent than ICE vehicles (and so possibly more prone to other technology scarcity events), it’s not as apparent to me that exponential increases in units being produced ensures reduced costs over any meaningful timeline.

It’s also not apparent to me that it’s not the case. Which spurred a question, rather than any critique.

Though to be fair to your point and back on topic, you mentioned a timeline only 10 years out and so limited to a time scale that surely predates BEV adoption that puts a material strain on natural resource costs, etc.
Anyhow, none of this was intended as critique but instead just question.

Well I'm pretty sure Tesla wouldn’t be getting into extraction and refining if they didnt have to, because suppliers can keep up.

On the subject of resource scarcity, I'm pretty confident that there are enough reserves to fabricate, and then recycle, enough batteries for 100% EVs, easily so if we go the robotaxi route for better ToU. But I do have some concern that we are there yet, and the consequences of not achieving that milestone.

Development profiles aren't a natural law so they can most definitely be held up or even stopped, there are no guarantees, and given the overall sensitivity of the economy to both oil and currency fluctuations, the risks are not trivial. Not at all. It will take a substantive effort to achieve EV dominance, and doing so without the assistance of fossil fuels to enable that change, will likely be harder than we can manage. That is at least for the moment, until it reaches critical mass and is self sustaining.

 

[charliemagpie]

Not as much as we in the West need China it seems. Trade deficits are telling, Australia has next to no manufacturing capablity anymore. Without wafers everyone in the West is stuffed. Australia has its own perspectives of course, we're also of interest if Indonesia doesn't come first, 100,000 ferrys and largest southeast army. The whole cancellation of the French submarine deal and taking on the US/UK nuclear powered subs instead was a deterrent move, there's no doubting that. It's handy to have a platform that can also launch nukes if we need too.

Australia barely has a soldier for every mile of coastline. We're like a smorgasbord of resources and our borders have been protected by others since our foundation through the empire and then commonwealth. Now that our head of state died today there will be renewed call to make Australia a Republic, and with it will go our last percievable defence. Europe is busy, USA is fighting itself more than anyone else willst being invaded by southern parts of the Americas, who's left on the world stage to play policeman, especially now after pandemics and co where everyone is still in recovery?

Hey at least it will get all them darn doll bludgers off me beach! Time to learn Mandarin mate. Lol

I'll be there with you in my togs standing shoulder to shoulder... We should scare any threat away lol

My favorite wife's uncle in China, a retired Engineer, had worked in Germany. He can't speak English, but knows a little German (not by stature lol).. so I am actually learning a few German words ready for next Chinese New Year. I tried learning Mandarin.. I am useless. I am waiting for Neuralink.

Back to business,, you are absolutely right... but we are a customer. Having the customer is the hardest part.

 

[cvalue13]

On the subject of resource scarcity, I'm pretty confident that there are enough reserves to fabricate, and then recycle, enough batteries for 100% EVs, easily so if we go the robotaxi route for better ToU. But I do have some concern that we are there yet, and the consequences of not achieving that milestone.

touches on a point I avoided raising before, but since you’ve pointed at it:

aside from potential resource scarcity cost effects, when I heard “in 10 years ICE will be more expensive than BEV” I heard it to assume that in 10 years people are still predominantly following the personal vehicle model.

I wonder if cost comparisons of ICE vs BEV in 10 years is moot instead because in 10 years many people will increasingly not be faced with the same ownership model.

which, to me, is an interesting question to direct at Tesla’s business model - as I take their projections of how many personal vehicles they’ll be making to assume the continuation of that model.

 

[JBee]

touches on a point I avoided raising before, but since you’ve pointed at it:

aside from potential resource scarcity cost effects, when I heard “in 10 years ICE will be more expensive than BEV” I heard it to assume that in 10 years people are still predominantly following the personal vehicle model.

I wonder if cost comparisons of ICE vs BEV in 10 years is moot instead because in 10 years many people will increasingly not be faced with the same ownership model.

which, to me, is an interesting question to direct at Tesla’s business model - as I take their projections of how many personal vehicles they’ll be making to assume the continuation of that model.

EM has said long ago they will stop selling vehicles to customers. At the time everyone though he was a mad hatter. What car manufacturer plans to not sell there cars??

I fully expect Tesla NOT to sell private vehicles of some model types as the cost of private transport dwindles to cents on the mile, where nobody considers robotaxi transportation unaffordable.

I still have some issues with robotaxi around hygiene, security and peak availability. Also living out bush has its own challenges, and waiting hours for a lift is a no go. But I think robotaxi makes sense in the cities, although I don't think we should have cities in the future either...lol, that might happen by itself given that we'll all be dying out of old age with the impending population collapse and all.

 

[Ogre]

With all due respect, I was not missing the point - but you may have been missing mine?

The remainder of your post, regarding bringing down the price of constructing batteries, to me seems to assume a broader background fact: abundance and stable pricing of raw materials or other buildingblock technologies required to produce infinitely more BEV vehicles for personal use:

I am suggesting something which has been fundamentally true with growth of new technologies will remain true with another new technology. Considering battery technology has been following this law for the past 15+ years, it’s not a stretch to expect it to continue following it.

You are assuming constraints will emerge, but constraints always emerge. Look at the semi-conductor industry for example. Every time someone said Moore’s Law (which is essentially a variant of this) would break due to constraints, new technologies were created which bypassed those constraints. How long many decades have integrated circuits been improving for?

This can only be true, it seems to me, if one assumes adequate available natural or other resources.

When you assume resources are limited, you are assuming there are no alternatives. This is not the case. As a simple example, look at the most scarce (and destructive in human terms) element in battery production right now: Cobalt. Tesla’s next generation cells are eliminating cobalt from their cells. As resource constraints crop up, people find alternatives.

In the aircraft industry, they ran against the fundamental limits of materials so new materials were created. Aluminum skins replaced wood and canvas. Titanium and carbon fiber replaced aluminum.

For batteries we’re already seeing this. Nickel is the next big constraint in battery production. We’ve created LFP cells to work around that shortage for cells where lower density storage is acceptable and Tesla is also replacing nickel with manganese or using manganese to increase the energy density of iron based cells.


Wrights Law isn’t a trivial thing, it’s proved out again and again in almost every major industry.

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