NEW YORK - Tesla may finally be on the cusp of getting its pricey Model 3 car ready for the mass market. The cost of electric batteries has always been the problem, for both boss Elon Musk’s manufacturer and rivals from General Motors to Volkswagen. It can add some $15,000 to a car’s price compared to a gas-guzzling alternative. But Tesla may have found the answer.

As soon as the end of this year, the $149 billion electric-car maker could be installing batteries in Model 3s it’s selling in China that cost as little as $60 per kilowatt-hour, according to a Reuters exclusive. That’s way below the $100/kWh that is generally regarded as where battery-powered cars can compete on price with those that drink gasoline.

The company has developed, in collaboration with China’s Contemporary Amperex Technology, batteries that use either little or no cobalt. That’s the most expensive part of the unit, and it’s also questionable on environmental and social metrics. The largest deposits are in the Democratic Republic of Congo, where issues from drought to so-called artisanal mining – which, often, means child labor.

If successful, Musk may well open up swathes of new customers for electric vehicles, which accounted for just 2.5% of global car sales last year. His plan, according to Reuters, also involves making these new batteries have enough storage capacity so that they could also be used by electric utilities. Musk is due to officially unveil his battery strategy in the coming weeks.

But there are a couple of challenges. First, the infrastructure – in other words, charging stations – is still lacking for broader uptake of electric vehicles. People can buy them, sure, but powering them up on a cross-country trip is another question.

Second is Elon Musk himself. He been predicting a sub-$100/kWh battery for some time, without as yet delivering. That’s just one of the many pledges he has either not kept, or whose timing he has let slide. Others include everything from timing of the Model 3 launch and sales targets, to quality control to insurance products, to how well-developed Tesla’s autonomous-driving capabilities are.

He may yet come through this time round, but it would certainly give the skeptics a jolt.

CONTEXT NEWS

- Tesla is planning to introduce new lower-cost batteries with longer life into Model 3 cars sold in China as soon as later this year, Reuters reported in an exclusive article on May 14. The battery, being jointly developed with China’s Contemporary Amperex Technology, would allow electric vehicles to be sold at a profit for the same price or lower than vehicles that run on gasoline.

- The battery would at some point be introduced into Tesla vehicles in other markets, with the goal being to improve both energy density and storage capacity, as well as reduce the price even further, the article said. The batteries could also be later used in electric-grid systems.

(Editing by Lauren Silva Laughlin and Amanda Gomez)


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