How Tesla plans to make batteries cheap enough for a $25,000 car

Enlarge (credit: Aurich Lawson / Getty Images)

Tesla's business model depends on continuous improvements in the cost and energy density of batteries. When Tesla was founded in 2003, it was barely possible to build a battery-powered sports car with a six-figure price tag. Over the next 15 years, cheaper and more powerful batteries enabled Tesla to build roomier cars with longer ranges at lower prices.

Tesla expects that progress to continue-and maybe even accelerate-in the next few years. And it isn't waiting for other companies to come up with better battery designs. In recent years, Tesla has had a large team of engineers re-thinking every aspect of Tesla's batteries, from the chemistry inside the cells to the way the batteries are incorporated into vehicles.

At a much-touted Tuesday event, Tesla pulled back the curtain on a suite of improvements the company hopes to roll out in the next three years. In total, Tesla says that all of these innovations put together will enable a 56-percent reduction in the per-kWh cost of its batteries.

Read 33 remaining paragraphs | Comments