Tesla Pushes Japanese Suppliers as It Seeks Battery Partners
2015-03-27 15:49:10.206 GMT
By Craig Trudell and Masatsugu Horie
(Bloomberg) -- A Tesla Motors Inc. battery executive
courted partners in Japan for its so-called gigafactory,
praising local companies for top-notch quality and technology
while cautioning against slow decision-making and risk aversion.
Japan ranks behind only North America as a source of parts
for the maker of the Model S electric sedan, Kurt Kelty, Tesla’s
director of battery technology, said Friday in Osaka. While he
said that Tesla looks to Japan for the world’s most advanced
technology, including electric components and displays, he also
alluded to weaknesses, without naming specific companies.
“We need to take risks, otherwise there will be no
prosperity in business,” Kelty said at an event hosted by the
Osaka Business and Investment Center. “We take risks, but it
seems not the case in Japan.”
Chief Executive Officer Elon Musk wants to transform Tesla
into more of a mass-market automaker by building a battery-cell
factory big enough to supply 500,000 vehicles by 2020. The Palo
Alto, California-based company is counting on close proximity of
suppliers and economies of scale to reduce battery costs by 30
percent and let Tesla sell a $35,000 electric Model 3.
Tesla has so far joined with larger, established Japanese
companies, such as Panasonic Corp. and Denso Corp., Kelty said.
The automaker is open to relationships with small and medium-
size suppliers with good technology, he said.
Kelty said Japanese suppliers Tesla has worked with have
shown strength in meeting commitments for parts delivery. At the
same time, he said that moving too slowly has been a weakness
among such companies.
Another Test
“Decision-making often takes time,” Kelty said. “For
example, when the product is almost ready, they may want to do
the test again.”
Panasonic, Tesla’s battery-cell supplier, this week
forecast a 23 percent increase in profit in the fiscal year that
begins next month as the Osaka-based electronics maker expands
its automotive business.
The company has declined to confirm how much it will invest
in Tesla’s gigafactory. Musk has estimated that Panasonic’s
contribution will be $1.5 billion to $2 billion.
Kelty said Tesla once asked for a production increase from
a Japanese supplier, which resisted and suggested the automaker
slow its expansion plan. He didn’t identify the supplier.
“We’re a growing company, and therefore we need to put
pressure on the suppliers, so the suppliers need to grow as
well,” he said.
Chieko Gyobu, a Panasonic spokeswoman based in Tokyo,
wouldn’t comment on Kelty’s remarks when reached by phone.
Hironori Yoshida, a spokesman for Kariya, Japan-based Denso,
also declined to comment.
Kelty worked more than 14 years for Panasonic before
joining Tesla in March 2006. He is the lead negotiator with
Panasonic to determine their partnership at the gigafactory,
according to his LinkedIn profile.
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