Do you believe Tesla will sell battery packs to other car manufacturers?

[joeinslw]

I'm not sure how many Tesla investors feel about this question, however I feel that Elon will allow battery packs to be created or modified for other car manufacturers in the future.
I have been involved in Tesla (tsla) i.e. owning shares since 2012, and I followed Tesla before that, I believe that Tesla Motors was started because Mr. Elon Musk saw what GM did in 1990's when they recalled all the leased EV1's they made, and then crushed them.
Elon saw the passion those EV lessees had when they marched to get their cars back, they wanted to buy the car they were leasing, instead they were destroyed, that really happened.
I don't know how soon battery packs will be created or sold to other car manufacturers, but I feel that will happen that will also get more EV's on the streets faster if more of them are available at reasonable prices.
Don't forget Elon did give some of his patents to car companies that wanted them so they could get into the electric car business.
Elon's reasons for doing that are his, but I think he didn't want to hog the business strictly for Tesla, and it made sense that he would.
If he did hog all the EV business, then other car companies could give Tesla a hard time going forward, they might have made it impossible to get traction in the market, both politically and monetarily.
Competition can be a good thing for business, it could make a better product for both the consumer and the manufacturer, because there is a learning curve with any business, especially in this one when there were no EV's on the road, and nobody was selling them.
Then there was the dealership problem that Tesla went through, selling EV's with Ford and other car companies takes some of the dealership pressure off Tesla.
As we all know Tesla can sell their electric cars online with much less of a problem than when they started, and I think that the dealers are satisfied now that they can sell their EV's in their dealerships, and will make their profits in the way they originally wanted.
Tesla can sell their cars in the way they wanted online, and in this way everyone wins thanks to the genius of Tesla's C.E.O Elon Musk.

Best Wishes,
Joe Florio

 

[Doug_G]

Both Daimler and Toyota have bought packs from Tesla in the past.

 

[RobStark]

I don't believe Tesla has extra capacity to sell to other automakers and will not have any for a very long time.

Elon Musk believes he can sell every cell the GF makes maybe even pre sell it before it is even made.

 

[dalalsid]

Tesla can sell GAAP - GF as a Product instead of packs. But let's say Hyundai or Tata came up to Tesla for 10GWh of packs. Will Tesla say no to this business or will they ramp up faster with the extra money poured in?

 

[Sudre]

If any other car maker starts asking Tesla for packs then demand is so high that other car makers see profit potential too. If that is the case Tesla will not have extra cells to sell. They will actually need to start on the second GF to support the Y, sports car and trucks.

 

[ggr]

An interesting question. I think Elon would go for cornering the market in Gigafactories, as that would expand the adoption of EVs most quickly. But he'd still want the best cars out there, so Tesla wouldn't suffer too much.

 

[JoaoD]

I believe Tesla can and will be a battery manufacturer in the future. Gigafactory is set up for this. But for now the demand is way higher than the production.
If other car manufacturers want to sell mass market EV's and they can't buy enough batteries from other manufacturers I'm sure Tesla would likely sell them the batteries with a high margin of profit.

 

[adiggs]

My guess, as a very interested observer and follower of Tesla and Elon, is that Tesla will be willing. They may or may not be ABLE, due to the demand they have and will be experiencing for their own products. If the factory is running at a functional 100% capacity filling Tesla's direct product demand, then they really don't have the option of selling packs to others.

If the factory is running at 80% capacity to fill Tesla's demand, and they can get it up to a functionally full / 100% capacity by selling packs to others, then I think the company would be happy to do so.

 

[Gerardf]

I can see Tesla / Panasonic do JV with another car manufactorer to jointly build additional GigaFactories, where they split the output. The third party will have to do a major part of the capex funding, Tesla / Panasonic will build the factory. A good first candidate would be VW.

 

[SwTslaGrl]

I think becoming a subcontractor to the auto industry is not ideal. It could quickly go from full order books to zero depending on a lot of factors.

 

[doctoxics]

No they won't sell battery packs to the auto industry, but they will sell autonomous driving hardware/software to the auto industry, simply to save lives. The right thing to do!

 

[dauger]

I say the answer is no, and the math that says why is simple:

The original Gigafactory plan was to generate 35 GWh per year, and the new plan is about 50 GWh per year. If the average battery capacity per Tesla is 90 kWh then the maximum annual BEV production is somewhere between:

35 GWh / 90 kWh = 380,000 BEVs per year
50 GWh / 90 kWh = 550,000 BEVs per year

Tesla has ambitions to someday make over a million BEVs per year. Clearly they'll need every cell the Gigafactory makes for their own products. Grid storage products result from any irregularity between battery and BEV production, so no cells are left over for third parties. To get to a million BEVs per year, they're going to need another Gigafactory.

 

[RobStark]

The original Gigafactory plan was

The original GF plan was to produce 35 GWh of cells and 50 GWh of battery packs using 15 GWh of cells imported from Japan to supplement domestic production.

The new plan is 105 GWh of domestic cells and 150 GWh of battery packs. Some of those packs will be used for battery energy storage.

Plus GF2 should be announced later this year for a specific country in Europe.

 

[dauger]

The original GF plan was to produce 35 GWh of cells and 50 GWh of battery packs using 15 GWh of cells imported from Japan to supplement domestic production.

The new plan is 105 GWh of domestic cells and 150 GWh of battery packs. Some of those packs will be used for battery energy storage.

Plus GF2 should be announced later this year for a specific country in Europe.

I stand corrected. Thank you.

 

[sledhead36]

I think it has always been the plan.

 

[Jimmy 1]

Of course they will, I believe Elon wants to sell batteries to everyone. Why not become the best and control that technology.

 

[RobStark]

Of course they will, I believe Elon wants to sell batteries to everyone. Why not become the best and control that technology.

Because Tesla will not have enough batteries for everyone.

It will be tough to build out enough capacity to meet needs of Tesla Automotive,Tesla Energy plus have a consistent supply for another large user of batteries.

Elon Musk reckons the world needs ~100 Gigafactories.

Tesla maybe can acquire the capital and have the management bandwidth for 5-10 Gigafactories. Someone else needs to put up the balance. Really, Tesla is not going to have a monopoly on batteries.

 

[ggr]

The margin is generally higher on finished goods. So Tesla makes more margin by selling the cars, not just the batteries. Also the batteries are effectively cheaper for Tesla, since a competitor would have to buy it at a price that makes money for Tesla, then mark it up to keep their own gross margins, so a cloned Model S with a Tesla battery would be more expensive than a Tesla Model S. This might make sense for niche markets, but not for electrifying the world or beating Tesla. The best strategy for Tesla, both (a) for the company profits, and (b) for saving the world, is to keep the batteries for their own cars (and TE) and make everyone else build their own gigafactories.