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Prices of Tesla May Drop By $10K by 2022 Due To Battery Advances

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Tesla's battery advances permit us to make some 2022 Tesla pricing predictions. These predictions are based on his expectations for Tesla Battery Day next week.

Torque News Tesla news reporter Paul Fosse has the details on future Tesla pricing.

Paul, referring to Tesla Youtuber Warren Redlich's 2022 pricing predictions writes, "Today, all the Tesla vehicles use similar battery chemistry. The cell size is different between the Model S and X and the Model 3 and Y, but all 4 cars use similar lithium nickel cobalt aluminum oxide batteries (NCA). Warren expects that by 2022, Tesla will use 3 different battery chemistries in their cars."

1. The lithium iron phosphate (LFP) batteries have not been used in cars since their energy density has been inferior to NCA batteries. This means for the same amount of power, the batteries both weigh more and take up more space in the car. These batteries have gotten better and they now are good enough that they offer sufficient range for Tesla to start using them in their standard range vehicles.

2. The existing lithium nickel cobalt aluminum oxide batteries (NCA) should continue to power most of Tesla’s vehicles with minor improvements in range and cost.

3. The new advanced battery pack (ABP) is a new high-performance battery chemistry Warren expects to offer higher performance, but only have limited availability.

Paul concludes that the range and cost projections for a little more than a year from now will rock the market. "I’ve heard the adage that every $5,000 cut in price doubles the addressable car market. If this is true, dropping the $8,000 (from $37,990 today), while the average new car goes up about 3% (or over $1,000) a year means that the base Tesla Model 3 will be about $10,000 cheaper than the average new car in the US and have about 4 times the addressable market it has today. This is why Tesla is going from 1 factory to supply the world (Fremont) to 4 auto factories to supply the world (Fremont, Shanghai, Berlin, Austin). They will need about 4 times the capacity as they start to make cars that are more affordable than today’s Model 3. Later this week, I’ll discuss Warren’s predictions for 2025," he says in conclusion.

Also, see Torque News Tesla reporter Tinsae Aregay's take on Tesla Battery Day and its excitement.

Armen Hareyan is the founder and the Editor in Chief of Torque News. He founded TorqueNews.com in 2010, which since then has been publishing expert news and analysis about the automotive industry. He can be reached at Torque News Twitter, Facebok, Linkedin and Youtube.