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Why is there a current battery supply problem?

Discussion in 'TSLA Investor Discussions' started by vin5xxx, Nov 7, 2013.

  1. vin5xxx

    vin5xxx Member

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    Panosonic and Tesla have been partners for several years. Obviously they planned for production levels in the current range. Certainly they would have had contingencies to increase/decrease production rather quickly as needed. So why are they stuck at 550 battery packs/week? I know they are re-opening past lines that were shut down but I am very disappointed in the current production levels and I am shocked that the reason is cell availability. Both Panasonic and Tesla should have had a plan to increase production at a far higher rate.
     
  2. pGo

    pGo Member

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    Agreed. That bugged me too. Elon has been talking about production issues for more than 6 months now. And still no immediate resolution yet. Execution and leadership at stake.
     
  3. SteveH

    SteveH Member

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    My WAG has been that Panasonic was unwilling to sign the agreement until now because they were concerned about Tesla's long term viability and didn't want to invest a ton in new manufacturing for lion batteries if there wasn't going to be a long term market for that kind of volume.
     
  4. XrstalLens

    XrstalLens Model S P1327 VIN P01867

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    Don't forget how big of an impact Tesla is having on global Li-Ion cell production. At current production rates, Tesla is consuming approximately 3.5 million cells per week, or 200 million a year, which is approximately 30% of global production capacity (see http://www.greencarreports.com/news/1086674_will-tesla-alone-double-global-demand-for-its-battery-cells). If I were Panasonic, I'd want to be darn sure Tesla is going to stick around long term before building new plants and reactivating mothballed plants at that kind of scale. So, I can't say I blame them.
     
  5. brianman

    brianman Burrito Founder

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    If I were Panasonic and I heard these whispers about Tesla being battery constrained, I'd get off my duff and sign a contract extension ASAP before they go shopping elsewhere. Oh wait, they just did that...

    Just sayin'.
     
  6. XrstalLens

    XrstalLens Model S P1327 VIN P01867

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    I'm with you. I think Tesla has gotten to the point where they can pretty well show they'll be around long enough to make the investment, and Panasonic appears to concur.
     
  7. Ziggy

    Ziggy Member

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    Oil companies buying up batteries to cause a supply constraint..... hehe:rolleyes:
     
  8. ItsNotAboutTheMoney

    ItsNotAboutTheMoney Active Member

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    Based on previous publicly available estimates of projected construction costs, it's a bit over $4.nn per (cell per year) for manufacturing capacity. If Tesla wants 1.8 beeeellion cells over 5 years, then an extra 210M cells per year would require over $840M in investment, and that's assuming fixed demand from the get-go. Also add that this capacity will be for Tesla. Given the significant capital investment required, if Tesla wants a low price per cell Panasonic needs to be very confident that Tesla can survive to complete the contract. Both sides are hoping this will be a long-term synergistic partnership, so I'm not surprised there was careful negotiation.
     

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