Tesla vs. LG Chem & CATL

[ammulder]

Everyone keeps talking about how Tesla is light-years ahead of other automakers in battery technology.

The problem with this line of thinking is that the OEMs are not the ones making the batteries.

In terms of battery tech, as far as I can tell Tesla is really competing with LG Chem & CATL, and to a lesser degree future entrants like Northvolt. Perhaps someday with Panasonic too, if the partnership diverges or if e.g. Panasonic/Toyota makes advances that aren't shared with Panasonic/Tesla.

I'll buy that GM and Ford aren't making major advances in battery tech. But I would have to think LG Chem and CATL aren't planning to just ride today's battery chemistry through an age of declining value until it expires and they go bankrupt. Shouldn't they be hard at work on new chemistries too? China has some brainpower, and I have to think CATL is currently better-positioned than Tesla to take advantage of battery research there.

Any real idea whether the OEMs are going to be able to ride third-party battery improvements to better compete with Tesla's efficiency going forward? I don't have any real evidence of it, but I wouldn't be so quick to rule it out, either.

 

[Tam]

...The problem with this line of thinking is that the OEMs are not the ones making the batteries...

What's wrong with thinking that OEMs don't make their own batteries?

Originally, Tesla thought they didn't have to create much of their own: Just gather all the parts or tell other companies to make their parts for them then just assemble them into a car.

They learned quickly that there are something that they'd better do it themselves such as motor, drive unit, and even Falcon Wing Door. Tesla originally contracted out to another company to supply Falcon Wing Doors but they also quickly learned that they needed to bring that inhouse and make those themselves.

Back to batteries: Most OEM thinks there are battery specialists out there so it doesn't make sense for them to reinvent the wheel and worrying about where the battery should come from.

Tesla thinks differently, it has done battery research and brought the manufacturing process inhouse.

Tesla does cooperate with specialists like Panasonic, LG Chem, CATL... to produce batteries for Tesla but under Tesla control: designed by Tesla including the chemistry cocktail.

...Any real idea whether the OEMs are going to be able to ride third-party battery improvements to better compete with Tesla's efficiency going forward? I don't have any real evidence of it, but I wouldn't be so quick to rule it out, either.

Other OEMs are just like Kodak in its best era. Kodak's products were highly valued. It was so profitable. It even spent money to hire its own scientists to create new photographic technology that does not require negative film developing with all those messy chemical liquids...

However, the management thought why should it worry about new technology when there's so much money with selling conventional films, prints, and chemical products?

Now, you know, Kodak went bankrupt!

That's the same with ICE companies. They make so much money with gasoline cars so even though they do have scientists researching battery, guess, who would they listen to? Money making smelly gasoline or money-losing battery researchers?

 

[ReflexFunds]

Three points here:
1) If cell producers such as LG Chem and CATL have the key tech ingredient/EV adoption bottleneck, they will make a large gross margin on the product, putting ICE OEMs at a large cost disadvantage vs Tesla who will make cells in-house.
2) There are huge benefits to vertical integration of cell, pack and even body design. An EV where all of these are designed by separate companies will struggle to compete with an integrated design.
3) Elon's companies have an engineering philosophy, strategy, culture and incentive structure geared to rapid innovation and accelerated cost experience curves. I see no sign that any other cell companies have anything close to competing with this.

 

[ammulder]

Three points here:
1) If cell producers such as LG Chem and CATL have the key tech ingredient/EV adoption bottleneck, they will make a large gross margin on the product, putting ICE OEMs at a large cost disadvantage vs Tesla who will make cells in-house.
2) There are huge benefits to vertical integration of cell, pack and even body design. An EV where all of these are designed by separate companies will struggle to compete with an integrated design.
3) Elon's companies have an engineering philosophy, strategy, culture and incentive structure geared to rapid innovation and accelerated cost experience curves. I see no sign that any other cell companies have anything close to competing with this.

#1 is a good point.

On #3, I agree that I've seen no sign, but then, I wouldn't have. I'm not that deep on the detailed progress of foreign battery companies. So
I was wondering if there are those here who have any more insight. I will point out that their costs have declined along that "new tech cost curve" that YouTubers are fond of pointing out. So they're clearly not doing nothing -- they're advancing the state of the art fairly rapidly already.

#2 is a great point... But is there no chance LG Chem or CATL will offer that as a product/service? You give them the dimensions of the space, they'll design and manufacture a full pack for you? Perhaps it won't happen, but if I were them, I'd be thinking there's a larger profit margin in moving into that vs. just selling cells. Though then that plays back into #1.

I guess my real question is, what are the chances they have the R&D and manufacturing prowess to come up with a 10% better battery than Tesla can, such that they can build in a margin and OEMs who buy those cells can still compete?

So far, I also see no sign. I wonder if we'll see a response after battery investor day.

 

[WarpedOne]

It all boils down to focus and scale... Tesla doesn't bother with laptop cells, cellphone cells, RC cells, ... it focuses on two applications only: automotive and large scale energy storage.
They focus all their development RD and production capacity and testing and designing the supporting infrastructure on those two fields.
LG Chem, Samsung, CATL also develop laptop cells, cellphone cells, RC cells, ... and they do not develop all the supporting infrastructure in the car.

Tesla can optimize their motor controller to best suit the cells, they optimize the cells to best suit their inverters and battery pack properties, they balance the cell properties with battery pack properties.
They can afford to make a bit less stable cells because they offset it with battery pack safety etc.

This is the beauty of vertical integration .. you do not juggle black boxes, you understand their internals and can optimize beyond boundaries.
Yes, everything the tesla does, LG could also do, physics is the same.

Question is are they willing to do it, do they have the vision and drive?

No, no and no.

 

[ammulder]

Exclusive: Tesla in talks to use CATL's cobalt-free batteries in China-made cars - sources

If true, this suggests that CATL is ahead of Tesla in one significant way. So don't count them out yet!

 

[mblakele]

This week the Economist published an article about CATL:

China’s “dreamchild” is stealthily winning the battery race

Now comes the hard bit: geopolitics

www.economist.com

The article describes CATL's history and current business, including expansion plans outside China and deals with "carmakers like BMW, Volkswagen and Daimler". The author makes comparisons between CATL's Zang and Elon Musk. The article concludes as it began: with digs at CATL's lack of interest in PR.

 

[mark95476]

This happened.

Tesla buys batteries from both LG and CATL for the built in Shanghai M3. Bjorn has tested the LG (M3 LR) and CATL (M3 SR) batteries and they are very good. CATL batteries charge a bit slower, but aren't affected by the cold. 0-60 acceleration with the LG batteries is near constant all the way down to ~10%.

Europe is finally going to get MY and they're certainly going to be using these same LG and CATL batteries.

Exclusive: Tesla in talks to use CATL's cobalt-free batteries in China-made cars - sources

If true, this suggests that CATL is ahead of Tesla in one significant way. So don't count them out yet!

 

[ammulder]

This happened.

Tesla buys batteries from both LG and CATL for the built in Shanghai M3. Bjorn has tested the LG (M3 LR) and CATL (M3 SR) batteries and they are very good. CATL batteries charge a bit slower, but aren't affected by the cold. 0-60 acceleration with the LG batteries is near constant all the way down to ~10%.

Europe is finally going to get MY and they're certainly going to be using these same LG and CATL batteries.

OK. When they first started shipping, I thought I had heard that some MIC model 3’s delivered to Europe had major range loss in the cold. Is that incorrect? Or a past problem that’s been fixed?

 

[Doggydogworld]

This happened.

Tesla buys batteries from both LG and CATL for the built in Shanghai M3. Bjorn has tested the LG (M3 LR) and CATL (M3 SR) batteries and they are very good. CATL batteries charge a bit slower, but aren't affected by the cold. 0-60 acceleration with the LG batteries is near constant all the way down to ~10%.

Europe is finally going to get MY and they're certainly going to be using these same LG and CATL batteries.

I just saw a Bjorn 3LR test which he said had Panasonic batteries. When did he test one with LGs?

 

[mark95476]

This past winter. This is old and somewhat dated. I think Tesla has improved cold weather performance on the LG packs since.

I just saw a Bjorn 3LR test which he said had Panasonic batteries. When did he test one with LGs?

 

[mark95476]

This is only applicable for the 2021 M3 with heat-pump--
I believe the Panasonic and LG cells were cold-gating badly initially, however, problems have been more-or-less resolved which also included changes to the heat-pump behavior. The CATL cells (for SR RWD) are very resilient and they also got the cold-gating improvements.

I'm going by memory and Bjorn has all of the latest Tesla test info for Europe.

OK. When they first started shipping, I thought I had heard that some MIC model 3’s delivered to Europe had major range loss in the cold. Is that incorrect? Or a past problem that’s been fixed?

 

[mark95476]

Tesla Model Y sales allow LG Energy Solutions to dethrone CATL as top battery vendor

South Korea’s LG Energy Solutions (LGES) has dethroned China’s Contemporary Amperex Technology (CATL) as the world’s top battery vendor. LG’s accomplishment was made possible by several factors, including the strong demand and increasing momentum of the Made-in-China Tesla Model Y. According to...

www.teslarati.com

"LG’s accomplishment was made possible by several factors, including the strong demand and increasing momentum of the Made-in-China Tesla Model Y."