What the new battery contract says about Tesla delivery numbers

[Aston]

It's public information that Tesla has signed a new contract with Panasonic covering the next 4 years for 2 billion battery cells for 7 billion dollars.

That works out to $3.5 per cell, which seems high compared to some of the research done on these forums.

If there's approx. 7000 cells in a model s that works out to $24,500 per car. (at least for the S85's), and 285,000 cars over 4 years or say 75,000 to 80,000 per year when averaging in the S60 models.

It seems almost impossible that the 3.1 cell will continue for the next 4 years. It's almost certainly going to be replaced with a 4.0 cell, etc, and it stands to reason that this contract is actually (mostly) such cells and hence the seemingly high price.

The same S85 would need only 5425 cells at a cost of $19,000 per car, and also puts it closer to 400,000 cars over 4 years.

Taking 100,000 cars x $80,000 ASP with a 30% margin (what Elon is actually shooting for if you look at his stock compensation options) and you get 2.4B. Considering that the growth story will be the same at that point with the Gen III around the corner, if the stock has the same multiple as it has today, doesn't that mean a 96B market cap in the next year or two?

 

[rolosrevenge]

I would think not because today's pricing includes most of that growth in it. I would imagine that a lot of those batteries will go to Gen III. They'll have to make a lot of packs before it goes into production.

 

[PeterJA]

It's public information that Tesla has signed a new contract with Panasonic covering the next 4 years for 2 billion battery cells for 7 billion dollars.

Incorrect. According to the Bloomberg article, Panasonic "declined to comment on battery revenue from Tesla," and the $7B number is a guess by a Bloomberg analyst based on who knows what.
Panasonic May Add $7 Billion Sales From Tesla New Cell Contract - Bloomberg

 

[fjm9898]

Also i just want to point out that some cells will be going to Toyota and Mercedes as well i am willing to bet. not saying its going to be a huge % of them, but some.

 

[richkae]

That's not public information. That's not even "hearsay".
The press release says "nearly 2 billion cells over the course of four years" but there is no dollar amounts anywhere in it.
The $7 billion dollar number was made up by the press, it has no basis in fact.

 

[fjm9898]

Yes i am willing to bet he was guessing using open market prices of current cells. I am sure Tesla got a good discount for a bulk buy like that. Also i am sure Panasonic was itching to get that other factory going again.

 

[vgrinshpun]

The energy analyst (oil?) that Barron was quoting is either plain clueless on the subject or has agenda. The battery pack level pricing is under $14,000 according to the interview Elon have given in Germany (linked below, second video, 5min 50sec mark). The cost of cells is obviously less than the cost of the battery pack.

Verpasste Zukunft

 

[yobigd20]

All of these means nothing because you don't even know if they are going to use these cells for cars. These may well be used in the big battery storage systems being constructed at the superchargers.

 

[fjm9898]

I think we all have to agree you cant directly correlate those cells to MS/X production.
as i pointed out, Toyota and Mercedes.
and as ypbigd20 pointed out, Charging storage.
Extra battery packs for quick swap?
ect.

 

[vgrinshpun]

I think we all have to agree you cant directly correlate those cells to MS/X production.
as i pointed out, Toyota and Mercedes.
and as ypbigd20 pointed out, Charging storage.
Extra battery packs for quick swap?
ect.

Not according to Tesla Motor press release:

The lithium-ion battery cells purchased from Panasonic will be used to power the award winning Model S as well as Model X, a performance utility vehicle that is scheduled to go into production by the end of 2014.

 

[fjm9898]

That is just a press release and they can easily say car that since obviously its the majority. But they can be used for other things and there is no proof otherwise because we still have 4 more years. What if they buy more from another maker they are still talking to? Then we are talking about 600k cars in 4 years? No one knows so this is pure speculation that all 2billion cells are going to go in 300k MS/X in the next 4 years. Damn we want it to, but i wouldnt put all my eggs in that basket quite yet.

- - - Updated - - -


40-45k cars next year
Leaves us with ~85k year for the next 3 years after that.
Its entirely possible if Elon is right and sees a 50k a year demand for MS and 35k Demand for MX.
but that is exactly why it had to be 2billion over 4 years so the naysayers dont get on their case that they arent going to meet their predictions.

 

[vgrinshpun]

That is just a press release and they can easily say car that since obviously its the majority. But they can be used for other things and there is no proof otherwise because we still have 4 more years. What if they buy more from another maker they are still talking to? Then we are talking about 600k cars in 4 years? No one knows so this is pure speculation that all 2billion cells are going to go in 300k MS/X in the next 4 years. Damn we want it to, but i wouldnt put all my eggs in that basket quite yet.

These cells will correspond to the minimum production of Model S/X over next four years. It is unlikely that these cells will be used for anything else, though, because Tesla Motors specifically tied this contract to Model S/X. This is the plan and it is absolutely the material information clearly intended for the Market. Expect more details on this subject during the Q3 ER call.

 

[peet365]

there is one detail that I think noone talking about. During 2ndQ earning calls Elon mentioned that optimal amount of cells is half of what they have today.
In other words ideal volume of cell should be double to 18650. If Pannasonic is going to build one factory especially for Tesla than it should produce optimal size of cells.
Press release does not talk about 18650, but about cylindrical shape baterries.
BMS would be cheaper to manufacture too and it should be possible to fit it in current model S - does not metter what is inside whole box as long as output is the same.
Tesla would have enough time to prepare production for new cells size, because new factory won´t be open overnight.
That of course would increase amount of cars produced from this 2bil cells - depending on the fact how many cells would be produced in this new factory and how many in old factories.

 

[DaveT]

The energy analyst (oil?) that Barron was quoting is either plain clueless on the subject or has agenda. The battery pack level pricing is under $14,000 according to the interview Elon have given in Germany (linked below, second video, 5min 50sec mark). The cost of cells is obviously less than the cost of the battery pack.

Verpasste Zukunft

Elon does not say the battery pack costs under $14,000 in that video. He says that it's under 40k EURO (from the interviewer's question) and more like 30-35% of the cost of the car though he couldn't reveal the exact cost because it's proprietary info.

 

[pGo]

Panasonic delivered 100M th cell in the month of June.

Panasonic will deliver 200M th cell in the month of December.

This suggests Tesla will roughly make 15K cars in q3 and q4. If q3 shows tesla shipping 6K cars, expect a huge jump in q4.

 

[Benz]

Panasonic delivered 100M th cell in the month of June.

Panasonic will deliver 200M th cell in the month of December.

This suggests Tesla will roughly make 15K cars in q3 and q4. If q3 shows tesla shipping 6K cars, expect a huge jump in q4.

That's interesting. Where did you get that info from (about the 200M th cell in the month of December)?

 

[Mario Kadastik]

Panasonic delivered 100M th cell in the month of June.

Panasonic will deliver 200M th cell in the month of December.

This suggests Tesla will roughly make 15K cars in q3 and q4. If q3 shows tesla shipping 6K cars, expect a huge jump in q4.

If that is indeed accurate, then this November 1st huge In Production wave that hit us might be for real. But it does sound a bit too good to be true.

 

[pGo]

Carmaker Tesla to step up supply of battery cells from Panasonic

 

[pGo]

"That is a big step-up from the 200 million cells Panasonic is expected to have supplied to Tesla in the two years ending this December."

Everyone is aware of the 100m announcement.

 

[vgrinshpun]

Elon does not say the battery pack costs under $14,000 in that video. He says that it's under 40k EURO (from the interviewer's question) and more like 30-35% of the cost of the car though he couldn't reveal the exact cost because it's proprietary info.

First off, I erroneously put dollar sign in front of 14,000, as Zzzz pointed out in another thread, the pricing is in euros.

I do not, however, see why you think that percentage is related to the price of the car, not the 40,000 that the journalist mentioned to be the price of the battery. Both the transcript, that is included below, and other information (detailed after the transcript) point to the fact that 30-35% meant to be applied to the cost of the battery mentinioned by the reporter, not cost of the car.

Transcript:
Q: Pricing in Germany starts up at 72,000 Euro, and that includes 40,000 for the battery, isn't it?
A: No, no. The battery is not 40,000 Euros, it is much less than that. I can't tell you what the exact number is, but it is much less than that. It's less than half , way less than half the cost. You know, may be more like 30% or 35%. I don't want to give an exact number because it is proprietary, but it is way less than the number you just said.

The other way to try to sort this out is to look at other hints that were provided during various interviews. For example JB Straubel was quoted in MIT technology Review article published in August of this year to say that battery pack costs 'less than a quarter (of car price) in most cases".

If your interpretation is correct, than the battery costs 21,600-25,200 Euros, or $29,800 to $34,7800 - way more that quarter of the cost that JB Straubel referred to.


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