Elon Musk, the billionaire founder of electric car maker Tesla Inc (NASDAQ:TSLA), has confirmed he will build and install the world’s largest lithium ion battery in South Australia.
The 100-megawatt (129 megawatt hour) battery is being designed in partnership with French energy firm Neonen.
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Jay Weatherill, the Premier of South Australia, said the battery will improve the security of energy supplies in the region which blacked out last year following a devastating storm.
World’s largest lithium ion battery will be installed in #SouthAustralia under a historic agreement between #Neoen #Tesla & SA Gov! pic.twitter.com/GcfrwOzD9g
— Jay Weatherill (@JayWeatherill) July 7, 2017
Earlier this year, Musk said he would have the battery built within 100 days or do it for free, a promise he isn’t backing down from although he admittted the project isn't without its challenges.
“There is certainly some risk, because this will be largest battery installation in the world by a significant margin,” Musk said in Adelaide earlier today.
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According to the billionaire, the next biggest lithium ion battery in the world is just 30 megawatts.
This will be the highest power battery system in the world by a factor of 3. Australia rocks!! https://t.co/c1DD7xtC90
— Elon Musk (@elonmusk) July 7, 2017
Musk expects the installation to help stabilise the grid as well as lowering prices for consumers in the area.
“You can essentially charge up the battery packs when you have excess power when the cost of production is very low ... and then discharge it when the cost of power production is high, and this effectively lowers the average cost to the end customer,” the 46-year-old said.
“It’s a fundamental efficiency improvement for the grid.”
Tesla shares crash again on Thursday
News of the battery comes at a turbulent time for Tesla. The automaker’s share price has been rocked over the past couple of weeks and has plunged by more than 20% since it posted a record close of US$383.45 on June 23.
The sell-off has been sparked by concerns over weak sales, increased competition and questions over the safety of its cars.
Big name banks such as Goldman Sachs and Bernstein have voiced their disappointment over Tesla’s second quarter deliveries this year. Wall Street had expected deliveries of around 24,000, while the company could only muster 22,000.
On top of that, competition is starting to intensify which means that Tesla – the biggest player in the electric car market – will likely give up market share in the coming years.
Volvo came out this week and said that by 2019 all of its cars will be either hybrid or electric, while there are rumours that BMW is planning to roll out an electric version of its popular 3-Series sedan later this year.
French president Emmanuel Macron said yesterday that France will ban sales of petrol and diesel vehicles by 2040, which will force the likes of Renault, Peugeot and Citroen to expedite their electric plans.
Model S not as safe as Tesla thinks?
To compound a bad couple of weeks, the Tesla Model S – previously dubbed the safest car in history – failed to receive a top safety award on Thursday.
The Insurance Institute for Highway Safety said the luxury sedan didn’t qualify for any award because it was only given an “acceptable” rating in the small overlap front collision test, which is when the front driver’s side corner is slammed into a barrier at 40mph.
“The main problem with the performance of the Model S was that the safety belt let the dummy’s torso move too far forward, allowing the dummy’s head to strike the steering hard through the airbag,” the report concluded.
The car maker responded by saying that the car scored the top grade in all other areas of the test.
Tesla shares slumped 5.6% on Thursday to US$308.83, although they were looking a little perkier in pre-market trading, adding 2%.
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