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Will Tesla and Panasonic again expand battery cell supply agreement in 2015, for S/X?

Discussion in 'TSLA Investor Discussions' started by Benz, May 4, 2014.

  1. Benz

    Benz Active Member

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    Here are 2 links to the Tesla Motors press releases regarding their battery cell supply agreement with Panasonic:

    Tuesday, October 11, 2011: "Panasonic Enters into Supply Agreement with Tesla Motors to Supply Automotive-Grade Battery Cells".
    Link: http://www.teslamotors.com/about/press/releases/panasonic-enters-supply-agreement-tesla-motors-supply-automotivegrade-battery-c

    Wednesday, October 30, 2013: "PANASONIC AND TESLA REACH AGREEMENT TO EXPAND SUPPLY OF AUTOMOTIVE-GRADE BATTERY CELLS".
    Link: http://www.teslamotors.com/about/press/releases/panasonic-and-tesla-reach-agreement-expand-supply-automotivegrade-battery-cells

    As Tesla Motors starts selling the Tesla Model S (and as from 2015 also the Tesla Model X) in more and more countries/markets, and as the global demand (for S/X) will keep growing in the next few years, is it likely that the current battery cell supply agreement (which has been expanded in October 2013 up to 1.8B battery cells in 4 years) will again be expanded in October 2015 to an even higher level?

    And what would the quantity of battery cells (again over a period of 4 years) of that next even higher level probably be?

    How about delivery of a total of 6 billion battery cells to be gradually delivered in the years 2016/2017/2018/2019 (each year more than the year before)?

    Keep in mind that Tesla Motors will use the current (Generation 2) skateboard platform of the Tesla Model S to build more future models (besides the Tesla Model X). A pick-up truck to compete with the likes of the Ford F-150, and a new really fast sportscar to compete with the likes of the new Mercedes Benz S-Class Coupe. These two models are most likely to be announced and built in the next few years, in my opinion. If you have other idea's, then you should share them with us.

    Post your thoughts/idea's/expectations/guesses on this topic here in this thread.
     
  2. ecarfan

    ecarfan Well-Known Member

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    #2 ecarfan, May 4, 2014
    Last edited: May 4, 2014
    Will Tesla and Panasonic again expand battery cell supply agreement in 2015, ...

    While it seems clear that Elon is very interested in building a pickup truck, and the current Model S platform is the right size for a typical "full size" pickup in North America, an EV pickup (let's call it the "Model Y" since "Model T" sounds like an anachronism") will be competing against vehicles like the F-150 that generally sell for less than US$35K. The Model Y would likely have to be sold for over twice that much (think of the battery power required to be able to haul a load over 200 miles without charging). Also, I suspect that on average, pickup truck buyers are more conservative in their buying habits than Model S buyers, and there may be some market resistance to the idea of an electric pickup truck. So I do not expect Tesla to produce a pickup truck for at least six years or more. The company has too much on its plate over the next five years.

    As to a "really fast sportscar", I don't consider an MB S-class coupe to be a "sportscar", and I don't expect for Tesla to to offer the Model S as a coupe within the next six or seven years because it would require a significant redesign of the chassis. It seems very likely that the Model E will at first only be available as a sedan.

    I do expect for Tesla to someday offer a real sportscar, a two seat roadster (a "Model R"?) that will compete against the Porsche Boxster and MB SL class. But that may also be six or seven years away, or longer as the market is much smaller than the sedan market.

    For the next three years Tesla is going to be focused on expanding S production, starting X production, preparing for Model E production, and building the gigafactory. All that has to be executed correctly or the company could fail. Tesla is still a small company trying to crack a market that is dominated by giants that produce and sell huge numbers of vehicles. Tesla is a bit player. I say that as a TSLA investor and enthusiastic supporter of the company's mission. As much as I would like to see Tesla building a wide variety of EV models within five years including compacts, coupes, trucks, and sports cars, I don't expect that to happen for a variety of reason including the fact that battery production capacity will is likely to be a limiting factor even after the first gigafactory is built. Elon will keep his focus on what needs to be done to establish Tesla as a viable car company and won't be distracted by anything else.
     
  3. vgrinshpun

    vgrinshpun Active Member

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    I do not believe TM will bring any new models before Model E. They have their hands full with GF and Model E. Success with both is crucial to Elon's vision of switching over to sustainable transportation and TM will be focused on it in the next three years or so.

    Regarding your question on the Panasonic battery supply, the short answer is that the currently planned capacity of the two Model S/X assembly lines of 113K cars/year seem to be fully addressed by the current agreement with Panasonic for 1.8B cells over 4 years and Panasonic's statement that they are going to build the second phase of the Suminoe factory to add 300B cells/year to the above agreement. See post linked below for more details:
    Tesla Gigafactory Investor Thread - Page 74
     
  4. rcc

    rcc Model S 85KW, VIN #2236

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    I agree with the above.

    Tesla will survive if they decide not to do the Model E. Given that they're heading full bore towards the E, they need the E to succeed. The GF is required for the E.

    This is enough to keep them busy for years. Additional models like a pickup or roadster will just distract from the primary goal. They can do those other models after the E is out and successful.
     
  5. Benz

    Benz Active Member

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    I should have mentioned that I do expect that those future Tesla EV models (to be built on the current Generation 2 skateboard platform of the Tesla Model S) will be announced/revealed AFTER the Tesla Model E will have gone into production. Sorry for the misinterpretation. Whichever Tesla EV models that are going to be, the point is that they will increase the total annual demand and production for Tesla EV's. Which will result in a even higher demand for battery cells. That's the point that I was trying to make.

    But anyhow, the real focus for this thread is the expansion of the battery cell supply agreement after only 2 years. That is a good sign of progress. And I expect that to happen again in Q4 2015.
     
  6. ItsNotAboutTheMoney

    ItsNotAboutTheMoney Active Member

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    If Tesla gave up on he Model, I think it'd die. The Tesla buzz is about what they're trying to do, not just what they're doing now. Pure premium would lose a lot of up-buyers and with lower volume suppliers, especially Panasonic, would be a lot less interested.
     
  7. rcc

    rcc Model S 85KW, VIN #2236

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    I disagree but then again, I live in Silicon Valley where it's hard to drive for more than 10 minutes without seeing a Model S.

    The stock buzz is about what they're going to do. People buy the stock because of the Model E.

    The balance sheet is about what they're doing now. The company is profitable and cash-flow positive because the S sells well against BMW, Mercedes, etc.

    If Tesla announced tomorrow that they were bailing on the E, the stock would crash but the company would live on.
     
  8. evme

    evme Member

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    I agree, I don't see any new models until Model E is out and has a decent production. Though they will do refresh on Model S and X as they go.

    The thing we have to remember is target audiences.

    The F-150 costs 25k and audience tends to live outside of cities and want longer ranges. That means to have a viable truck you would need 35k price tag and 500 mile range minimum. Which means around 2020.

    They might do a refresh of the roadster though maybe in 2018. The point would probably be to build a car with the fastest 0-60 to add wow factor to the brand and electric cars as a whole.
     
  9. mrdoubleb

    mrdoubleb Active Member

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    Agree with the above, E is the main focus now, the F-150 competitor is not even a "napkin design" at this point. Also, I bet the next vehicle after E will be, what was rumored to be Model Y, the SUV version of Model E. Maximize usage of the new E platform and deliver a car in one of the most popular form factors in the world these days: the small SUV. After that, they may start working on the new roadster as it could use the E platform as well.

    Tesla (Elon?) has already said in an interview the F-150 competitor will need a new platform - it will not use the S/X basis. Also, as others have pointed out, moving heavy stuff around on rough terrain in a big, heavy pickup will really drain the batteries. While an EV will really shine in those circumstances (think of the torque and getting rid of that large gas bill that goes with that insane consumption), we need cheaper, bigger battery packs for that.
     
  10. Jackl1956

    Jackl1956 Member

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    The mission of Tesla Motors is a solar electric economy as a sustainable solution. The expansion of battery supplies will be in support of EV product development and renewable energy storage systems. As SolarCity and Tesla Motors expand, their products will dovetail together to advance this goal.
     
  11. Benz

    Benz Active Member

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    Thanks for putting things in the right perspective, in very few words.
     
  12. ggr

    ggr Roadster R80 537, SigS P85 29

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    I wanted to pick up on this point. The reason they want longer ranges is because going and filling up at a gas station is a major pain in the neck. It generally isn't because they actually drive 500 miles in any one day. So an electric pickup with, say, 200 miles of range with a full load, and its promise of always being full in the morning, is probably sufficient.
     
  13. Chickenlittle

    Chickenlittle Active Member

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    I believe your right. Not to mant people would pick a pickup for long range travel. Of course some do but on you next interstate trip look around most are not using pickups
     
  14. uselesslogin

    uselesslogin Enthusiast

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    As someone who lives in Texas I just want to point out there are a lot of different trim levels for the F-150. For people who live in the suburbs they opt for the higher ones with the larger cabs. Those are more like starting prices of $40k-$45k. I don't know numbers specifically but people in Texas will buy a really nice truck instead of an SUV. My boss drives one and I would be shocked if his was less than $40k new. I think Tesla will be going for the buyers of the $40k+ trim levels and therefore could even be successful with a starting price of $50k.

    Of course I would argue that long distance travel is a big consideration as well since these higher-end pickup trucks are really just family vehicles.
     
  15. Benz

    Benz Active Member

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    Maybe a total of 6 billion battery cells are a bit too optimistic, and therefore a total of 4 billion battery cells are more likely.
     
  16. pz1975

    pz1975 Member

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    I think after the Model E, the plan should be to make a car at the next level down in price - to compete with the Civic for what is probably the largest market in the world. This could be feasible in another 7-10 years if battery costs continue to go down and efficiencies up.
     
  17. Benz

    Benz Active Member

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