Why Tesla's New 315-Mile-Range Electric Car Is a Huge Achievement

By Markets Fool.com

When electric-car maker Tesla Motors (NASDAQ: TSLA) first launched its all-electric Model S in 2012, the maximum driving range on a single charge the company offered was 265 miles. This crushed all previous records for production electric vehicles by a huge margin -- and no other automaker has even come close since. But since 2012, Tesla has continued to aggressively find ways to offer higher-range options for the sedan. And, as of Tuesday, Tesla has officially busted through the 300-mile barrier -- a critical milestone for all-electric vehicles.

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Model S. Image source: Tesla Motors.

Getting to 315 miles

On Tuesday, Tesla introduced a P100D version of its Model S and X. Equipped with a new 100 kilowatt-hour battery, this pushed the maximum range of these two vehicles from 294 miles for the Model S and 257 miles for the Model X (Tesla's new SUV) to 315 and 289 miles, respectively.

But this math understates the incremental range Tesla's new P100D achieved, as these previous records were achieved by Tesla's 90 kWh Model S and X options without a performance upgrade or Tesla's signature "Ludicrous" acceleration. When equipped with performance and Ludicrous acceleration Tesla's 90 kWh Model S and X have EPA-rated ranges of 270 and 250 miles, respectively. In other words, Tesla's new 100 kWh battery increased the range of similarly optioned S and X vehicles by a whopping 17% and 16%.

And Tesla achieved this while making its Ludicrous acceleration even more Ludicrous. A Ludicrous-enabled P90D was on record for achieving a 0-to-60 mph time of 2.8 seconds. But a Ludicrous-enabled P100D can hit 60 mph in just 2.5 seconds, making it the quickest production car in the world and the third-fastest production car ever produced, trailing records set by the La Ferrari and Porsche 918 Spyder -- two vehicles that only saw limited production.

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Tesla's battery evolution

What's perhaps more interesting than the new maximum range Tesla is achieving with P100D, however, is how the electric-car maker is boosting the range of its batteries.

Model S. Image source: Tesla Motors.

Since Tesla launched Model S in 2012, the pack size for its vehicles has remained the same. In other words, Tesla hasn't increased the maximum range of its battery packs by boosting their size, but rather by boosting their energy density.

And what's particularly interesting about this most recent range increase is that Tesla's jump from a 90 kWh battery to a 100 kWh battery didn't even require any improvements to the cell chemistry. The feat was instead achieved by a significant change in the module and pack architecture.

Tesla's aggressive push forward with its battery technology is important for several reasons.

First, it gives credibility to Musk's notable prediction last year that Tesla expects to increase pack capacity by roughly 5% per year on average. If this trajectory can truly be sustained, electric cars could soon rival -- and eventually even surpass -- the driving range of gas-powered vehicles.

Second, investors should be encouraged to see Tesla achieving significant improvements to the module and pack architecture of its batteries just as it's readying its lowest-cost vehicle yet -- Model 3 -- for a 2017 launch. Tesla CTO JB Straubel confirmed during Tuesday's phone conference with press that there's significant overlap between the achievements made in this new 100 kWh battery and the development of its batteries for its lower-cost Model 3. For example, perhaps Tesla's module and pack architecture discoveries with its new 100 kWh battery mean the company can now offer higher driving range upgrade options for Model 3 than was previously possible.

Sure, Tesla's Ludicrous acceleration just got more exciting with Tesla's Tuesday announcement, but the magic is in the company's significant and aggressive moves forward in battery pack energy density.

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Daniel Sparks owns shares of Tesla Motors. The Motley Fool owns shares of and recommends Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.