new Panasonic agreement!

[hcsharp]

Toyota is building 2600 Rav4 EVs, and that production will end this spring as Toyota moves on to a hydrogen car for CARB-ZEV compliance.

Are you kidding? How stupid is that?

I wonder if Panasonic has demonstrated some newer cell tech recently to Tesla. I know there are more advanced cells that they can make. Not sure if Tesla will be introducing them into cars or just testing them.

2 billion cells is about what they'll need for Model S and X alone in that time. 4 yrs is about how long before Gen III at which time they will need at least 5 - 10x the number of cells they are using now if they can build out the factory that fast.

 

[Benz]

When will Panasonic start to deliver battery cells under this new agreement?
Januari 2014 already, or will that be some time later in the year 2014?

 

[Benz]

When will Panasonic start to deliver battery cells under this new agreement?
Januari 2014 already, or will that be some time later in the year 2014?

Any idea/thought/guess/estimate/comment?

 

[Zzzz...]

Any idea/thought/guess/estimate/comment?

Ok, they had agreement that Panasonic should supply Tesla enouph cells to build 80k Model S/X in timeframe 2012 - 2015 (inclusive, link).

That agreement clearly have not expired yet. Mine guess most probable case is that the new one is superseding old one starting with some predefined date. Like new 2014 year(1st of Jan) or something.

But it is impossible to tell. Old one and old prices could be in effect up until TM get enouph cells to produce 80k units. And then new price structure begins.

Or new pricing may start immediately.

I'm basically saying that I got no clue

I have wrote this since no one replying to make you feel like you are not ignored

 

[Benz]

Ok, they had agreement that Panasonic should supply Tesla enouph cells to build 80k Model S/X in timeframe 2012 - 2015 (inclusive, link).

That agreement clearly have not expired yet. Mine guess most probable case is that the new one is superseding old one starting with some predefined date. Like new 2014 year(1st of Jan) or something.

But it is impossible to tell. Old one and old prices could be in effect up until TM get enouph cells to produce 80k units. And then new price structure begins.

Or new pricing may start immediately.

I'm basically saying that I got no clueView attachment 35251 I have wrote this since no one replying to make you feel like you are not ignored View attachment 35252

Thanks for your reply.

I guess we will only know it when the weekly production rate will start to rise substantially, right?

 

[Zzzz...]

I guess we will only know it when the weekly production rate will start to rise substantially, right?

No! The main point of this TM-Panasonic contract is to make sure Panasonic will be capable to increase production probably by late 2014 - starting year 2015 to certain higher levels compared to an old contract. It would not have an immediate effect in the coming months. Or next few quarters. Problem is a lead time. It definitely more then half a year. And probably more then a year.

In fact even before new agreement was signed one of Panasonic's supplier announced plans to triple production, and it takes them 9 months to do it (more if you include planning phase, Sumitomo Metal Mining to almost triple lithium nickel oxide production to meet planned demand for Panasonic cells for Tesla EVs ). But it is just one. Panasonic itself had to expand and the rest of supply chain had to do it too.

To put it into perspective, old contract was asking Panasonic to increase production to supply enouph cells to produce up to 35k battery packs in 2015. Quite a slow increase, Panasonic already producing enouph cells for 25k+ battery packs yearly. New contract seems to ask Panasonic to increase production rate for up to 90k battery packs in a year 2016 (hard to estimate but roughly in the ballpark of that number).

So this is one important part of the agreement. Another one is a price of cells. And it is impossible to know when new prices would come into effect. Contract details are private. And price Tesla paying for cells is dependent on volume. New contract might even superseded old one immediately after signing. But even if that was the case(not granted), Tesla would still move to lower prices gradually, as TM consume more and more volume.

 

[Benz]

No! The main point of this TM-Panasonic contract is to make sure Panasonic will be capable to increase production probably by late 2014 - starting year 2015 to certain higher levels compared to an old contract. It would not have an immediate effect in the coming months. Or next few quarters. Problem is a lead time. It definitely more then half a year. And probably more then a year.

In fact even before new agreement was signed one of Panasonic's supplier announced plans to triple production, and it takes them 9 months to do it (more if you include planning phase, Sumitomo Metal Mining to almost triple lithium nickel oxide production to meet planned demand for Panasonic cells for Tesla EVs ). But it is just one. Panasonic itself had to expand and the rest of supply chain had to do it too.

To put it into perspective, old contract was asking Panasonic to increase production to supply enouph cells to produce up to 35k battery packs in 2015. Quite a slow increase, Panasonic already producing enouph cells for 25k+ battery packs yearly. New contract seems to ask Panasonic to increase production rate for up to 90k battery packs in a year 2016 (hard to estimate but roughly in the ballpark of that number).

So this is one important part of the agreement. Another one is a price of cells. And it is impossible to know when new prices would come into effect. Contract details are private. And price Tesla paying for cells is dependent on volume. New contract might even superseded old one immediately after signing. But even if that was the case(not granted), Tesla would still move to lower prices gradually, as TM consume more and more volume.

It all seems to be more complicated than I initially thought. And the outlook for 2014 probably is less positive than I thought. Thanks for posting your thoughts on this matter.

 

[pi.uhl]

One month ago in Munich, Elon Musk talked about to make Agreement with second source. Either Samsung or LG will make the deal. Not to think whats happen when there is an earthquake or fire in the Panasonic Factory.

 

[renim]

It all seems to be more complicated than I initially thought. And the outlook for 2014 probably is less positive than I thought. Thanks for posting your thoughts on this matter.

At any stage Tesla could readily substitute cells from LG/Samsung/Sony/Tianjin Lishen for the Tesla 60kWh, actually if Tesla hasn't done all the validation required to do so for at least one of these alternate suppliers, then Tesla has left themselves vunerable to natural disasters issues.

Panasonic is proud that todate Tesla stays monogamous to them, and is likely to remain so for the next 4 years. My unsubstantiated opinion is that Panasonic's/Tesla agreement is a sliding scale with significant incentives if Tesla exceeds certain thresholds.

There is no cell production constraint for Tesla pre Gen III, and even Gen III can achieve considerable scale without the 'Gigafactory'

At some stage EV batteries will take over for Consumer Electronics as the cheapest battery, but that is only when the factories for EV batteries are larger than the factories for Consumer Electronics (ie the gigafactory). The sooner, the better.

I would hazard that compared to their German competitors, Tesla's cell cost basis per kWh is half (ie about $175/kWh vs $350/kWh) for a NCA/NMC type battery. The Mn2O4 cells from Nissan and LG would probably be comparable in price to what Tesla can obtain. This is all open to change, but it gives Tesla a strong moat in the premium end of the vehicle market.

 

[Benz]

There is no cell production constraint for Tesla pre Gen III, and even Gen III can achieve considerable scale without the 'Gigafactory'QUOTE]

Now you are really confusing me. You should explain yourself better.

Of course there is a cell production constraint (according to Elon Musk there is).

 

[renim]

cell production does not equal cell delivery, there is international shipping logistics in the middle.

Tesla for the 3rd quarter seriously ramped up vehicle production, there were the deliveries stated, but there was also an international pipeline filled up, or put it another way, a lot of cars intransit from California to Netherlands and within Netherlands. Within Netherlands there will be a stock a vehicles that are out of sequence as Tesla adjusts rollout in EU.

Panasonic delivery schedule could've been caught off guard by the surge in production, and plain Li ion cells generally are not airlift items. The Japanese also tend to be JIT, so large stockpile of cells probably don't exist. Such transient delays don't warrant adding a 2nd supplier to the mix, as they too have the same logistics/shipping delay.

Panasonic have stated a 2 billion cell supply for Tesla for the next 4 years, thats about 300,000 Model S, if there are 25k-30k model S this year, then for 4 years that could be 30+60+90+120 model S over 4 years, but if Tesla maxes out at 60K units for Model S&X combined, then there is 60k units of Model SX batteries for Model III which could be about 90k Model III batteries.

That is a good start for Model III production, and it excludes using any second source supplier.

Panasonic Panasonic and Tesla Reach Agreement to Expand Supply of Automotive-grade Battery Cells | Panasonic News Portal

 

[Benz]

Well, let's see how fast Panasonic can increase it's production capabilities. Because that's the first step of the whole supply process.

Although, Panasonic will need to buy (and get delivered) more raw materials in order to produce more battery cells. Right?

 

[lolachampcar]

There was a press release a few months back (if I remember correctly) indicating a huge increase in capacity for a Li supplier. I presume this was required to support Panasonic's announcement.

 

[RobStark]

There was a pow wow between Tesla, Panasonic and Sumitomo Heavy Industries.

Sumitomo promised to expand mining production, Panasonic promised to increase manufacturing capacity, and Tesla promised to buy more batteries.

Panasonic has right of first refusal regarding increased Sumitomo mineral production and Tesla has right of first refusal regarding increased Panasonic battery production.

 

[Benz]

There was a pow wow between Tesla, Panasonic and Sumitomo Heavy Industries.

Sumitomo promised to expand mining production, Panasonic promised to increase manufacturing capacity, and Tesla promised to buy more batteries.

Panasonic has right of first refusal regarding increased Sumitomo mineral production and Tesla has right of first refusal regarding increased Panasonic battery production.

What is the point that you want to make?
What should we conclude from your post?
I really don't get it. Maybe somebody else does?

 

[Discoducky]

What is the point that you want to make?
What should we conclude from your post?
I really don't get it. Maybe somebody else does?

Seems straightforward to me in that Panasonic gets first rights over increased production from SHI and Tesla gets first shot at the batteries first.

This is similar to how Diamler has first rights of refusal to purchase TM outright if another company wants to purchase TM.

 

[Benz]

Seems straightforward to me in that Panasonic gets first rights over increased production from SHI and Tesla gets first shot at the batteries first.

This is similar to how Diamler has first rights of refusal to purchase TM outright if another company wants to purchase TM.

OK, I think I get it now.

So when Panasonic starts to increase it's battery cell production, then Tesla Motors has the first right to buy them if they choose to do so. And when Tesla Motors would refuse to buy them, then Panasonic has the right to sell them to another buyer.

We know that Tesla Motors need a lot of battery cells. Therefore I think that they will not refuse to buy them from Panasonic.