DETROIT -- Tesla Motors' "gigafactory," a huge battery plant under construction in Nevada, could help suppliers of lithium ion batteries for autos finally turn a profit, says Prabhakar Patil, CEO of LG Chem Power Inc.
For most suppliers of lithium ion batteries -- used in gasoline-hybrid and battery electric vehicles -- profits are still a mirage. But that could change once Tesla begins manufacturing its own batteries, said Patil, speaking on the sidelines of a media event here for the 2016 Chevrolet Volt hybrid.
LG Chem Power, the North American arm of Korean supplier LG Chem, supplies the Volt's batteries.
Of Tesla's battery plant, Patil said: "It will drive up the volume in the industry for materials, and that will lower costs for everybody."
Last week, Bloomberg reported that lithium ion battery packs for electric vehicles cost about $496 per kilowatt-hour, down 60 percent from 2010.
Battery cost could drop to $175 per kilowatt-hour by 2020 -- about the time the Tesla plant begins production, Bloomberg reported.
GM would not discuss the cost of the Volt's battery pack. However, Sam Jaffe, an analyst with Navigant Consulting, estimates that the battery pack in the 2016 Volt costs between $10,000 and $12,000, or about $500 to $600 per kilowatt-hour.
The lithium ion battery pack Tesla installs in its Model S sedan uses around 7,000 small, round cells similar to those found in laptop computers. The 2016 Chevrolet Volt, by comparison, uses 188 cells that are flat and contained in a pouch.
"I give a lot of credit to Tesla for what they have done and what they are doing to change the image of the electric vehicle and growing the volumes," said Patil.