Tesla Motors CEO Elon Musk said on Tuesday that the company is seeking to build the world's largest lithium-ion battery plant. The scale of this factory will be huge. What we are talking about is equivalent to the total production of all lithium-ion batteries in the world-in one factory. Musk said in a conference call with analysts for the third quarter that it was really big.
The biggest challenge facing the electric car maker has always been how to ensure there are enough batteries. The company announced on Tuesday that it will expand its purchase agreement with Panasonic: it will buy three times as many batteries from the latter. Tesla plans to purchase at least $ 1.8 billion from the Japanese company over four years.
Battery supply issues have seriously weighed on Tesla's ambitions to expand globally. Musk has repeatedly mentioned the difficulty of getting enough batteries, and the company's regret that it failed to expand aggressively as expected due to battery problems.
In fact, the company had to adjust the delivery of its ModelS models in North America in order to please some European customers who have been waiting for ModelS for several years. Tesla recently opened a store in Beijing, but did not do much publicity, partly because it didn't want to solicit demand it couldn't meet.
If we can't meet demand, it doesn't make sense to stimulate and expand demand. Musk said so when he discussed supply shortages earlier this year.
Although Musk said he didn't want to reveal too many details about the battery factory plan, he actually said a lot:
The plant will likely be located in North America. It could be a one-stop factory: sourcing raw materials, producing finished battery packs (instead of just manufacturing batteries, and then hiring other companies to assemble battery packs).
The plant will focus on eco-friendly features such as the use of solar energy and recycling projects that use old battery packs to produce new ones. By the way, Musk is the chairman of SolarCity, a California-based solar panel installer.
Tesla may revamp the look of the battery pack. Maybe not. Currently Panasonic's batteries are traditionally cylindrical. Musk said Tesla may continue to use the same size and appearance. However, if it does change the battery design, the battery will not be much larger. We still have to wait and see when the cost per kWh of large batteries will become cheaper. He says.