Tesla is starting to develop its own battery cells inside a secret lab in a bid to control its own supply chain, report says
- Tesla will look to make its own batteries according to a new report
- The move would shift reliance on Panasonic, the company’s biggest partner
- Batteries are currently being developed in a secret lab next to Tesla’s plant
- A full transition to battery production likely won’t happen in the near future
- The report comes amid souring relations between Panasonic and Tesla
Tesla is planning to make yet another foray into controlling its own supply chain, says a new report.
According to CNBC, who interviewed several former and current employees of the Elon Musk-owned automaker, the company is actively developing its own battery cells that would allow Tesla to cut ties with current provider, Panasonic.
Tesla’s experiments, which are reportedly taking place in a secret lab next to its manufacturing planet in Fremont, California, would be a boon for the company whose electric cars rely on durable and advanced battery technology.
Tesla wants to take over the production of its batteries according to a new report from CNBC.
As noted by CNBC, battery packs and cells are the primary cost in making electric vehicles, meaning if Tesla were to successfully commandeer its own battery production, it could theoretically reduce costs in its supply chain and eventually costs to consumers.
Sources interviewed by CNBC report that the company is unlikely to achieve full battery independence in the near future and is expected to continue its relationship with Panasonic for the time being.
CNBC reports that the company is focusing its efforts on making lithium ion batteries with a goal of eventually being able to produce them in high volumes.
The reported intention to build its own batteries marks the latest indicator of an increasingly sour relationship between Tesla and Panasonic.
In April, Musk blamed Panasonic for slowing Tesla’s manufacturing pace, saying that the company won’t ramp up production of its cars until production at the jointly owned Gigafactory,reaches an output of 35 gigawatts per year.
As annouced by Musk, Tesla is working to ‘vertically integrate’ the company’s manufacturing.
Panasonic claims that it has been able to deliver that capacity.
Tesla has meanwhile continued to cut costs, laying off employees and tamping down on spending that some investors feared was growing out of hand. In the first quarter of 2019, Tesla lost $700 million.
If successful, Tesla’s battery development would expand a strategy by the company to keep most of its important important manufacturing processes in-house.
In addition to operating its own manufacturing plants, Tesla also sells its company’s technology, including software that helps automate plant processes.
WHAT IS TESLA’S ‘GIGAFACTORY’?
Tesla’s ‘Gigafactory’ is located on Electric Avenue in Sparks, Nevada.
The factory’s name stems from ‘giga,’ a unit of measurement that represents billions.
One gigawatt hour is the equivalent of generating one billion watts for one hour — one million times that of one kilowatt hour.
Tesla says the factory will be producing 35 gigawatt hours of batteries by 2018.
The current structure has a footprint of 1.9 million square feet, which houses 4.9 million square feet of operational space across several floors
It’s currently about 30 percent finished – and once complete, it will be the biggest building in the world
That’s the equivalent to the entire world’s production in 2014.
New York City uses around 52 gigawatt hours of energy per year.
Once completed in 2020, the factory is set to become one of the biggest buildings in the world, with a final size of 10 million square feet.
Already, the current structure has a footprint of 1.9 million square feet, which houses 4.9 million square feet of operational space across several floors.
‘Once complete, we expect the Gigafactory to be the biggest building in the world,’ Tesla said.