Print 10 comment(s) - last by flyingpants1.. on Nov 3 at 12:05 AM

It has upped its order to almost 2 billion lithium ion cells until 2017

In a vote of confidence where electric vehicles (EV) are concerned, Tesla Motors has decided to increase its order of lithium ion battery cells from Panasonic.

Tesla announced that it has upped its order to almost 2 billion lithium ion cells, which Panasonic will provide from now until 2017. This is a pretty significant increase from the 200 million cells Tesla is expected to have received from Panasonic in the two years ending this December.

“This expanded agreement with Panasonic is important to Tesla as we continue to increase the pace of production,” said Tesla Co-Founder and CEO Elon Musk. “We look forward to strengthening our relationship with Panasonic, and I’m confident that this partnership will continue to be an integral part of Tesla’s success for years to come.”

Panasonic's cells are expected to power the Model S and the new Model X, which will go into production by the end of 2014. 

While Tesla has a good relationship with Panasonic, the company is also looking into other suppliers to make sure it always has what it needs. Samsung and LG are just two others that Tesla is considering for future cell shipments. 

In the past, both Samsung and LG supplied cells for Tesla's electric Roadster. 

Tesla has a lot of confidence in its products and the future of EVs, and it has good reason to feel this way. The company successfully paid off its $465 million government loans nine years early, pulled a surprise profit for Q2 2013 with a revenue of $405.1 million, unveiled new tech for its Model S (swappable battery tech) and the Model S even snagged the highest safety rating from the NHTSA.

Musk certainly has no plans to develop other green car technologies right now, such as hydrogen fuel cell (he called those "bullshit" recently), so it makes sense that he's beefing up his company's number of cells for its successful EV business. 

Source: Tesla Motors

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Enough for about 400,000 cars
By Mint on 10/31/2013 12:39:34 PM , Rating: 2
That's quite an ambitious sales target, but still only projects to maybe 150,000 cars in 2017. If we assume $60k ASP with 25% gross margin per car, and two thirds of that goes to fixed expenses (R&D, superchargers, warranty, retail stores, etc), then we're still looking at sub $1B in profit.

Goes to show you how far ahead investors are looking with TSLA's $20B market cap, and how flawless Tesla's execution has to be to keep the price up there.

My opinion is that 100 mile EVs with cheap range extenders will gain a cost advantage on Tesla within a few years. They'll be profitable, but not as much as investors expect.

RE: Enough for about 400,000 cars
By FITCamaro on 10/31/2013 1:00:21 PM , Rating: 1
In this crappy economy, I'm wondering where they think they're going to find that many people who can afford $60,000 cars.

RE: Enough for about 400,000 cars
By Jedi2155 on 10/31/2013 1:05:23 PM , Rating: 2
You haven't been to LA/San Francisco where BMW and Mercedes are some of the most common vehicles here. I've seen plenty of youngsters in their late 20s early 30s with brand new 5 series BMW's and Mercedes C300 and up.

By Dr. Kenneth Noisewater on 11/1/2013 11:55:14 AM , Rating: 2
Can you lease a Model S for $499/mo?

RE: Enough for about 400,000 cars
By jimbojimbo on 10/31/2013 1:11:00 PM , Rating: 3
It's crappy for 99% of us but of the 1% they're doing better than ever and that's still over 3million people.

RE: Enough for about 400,000 cars
By Samus on 10/31/2013 1:30:04 PM , Rating: 2
They need extra cells for spare batteries, their battery swap program, and the Model X will have larger battery packs than the Model S, using more cells in the process.

Still, that's got to be a record-breaking order. 2 Billion cells.

RE: Enough for about 400,000 cars
By Belegost on 10/31/2013 1:31:08 PM , Rating: 3
Well, it seems like people are increasingly taking longer loans, and paying more per month.

So at say 3% with 5k down, the payment is a mere 650/month - easy right?

Sarcasm aside people just have distorted priorities. I know friends of my wife, they stuff 2 adults and 2 kids into a 2 bedroom 1 bath apartment, but have a new Mustang and BMW with over 1000/month in loan payments...

RE: Enough for about 400,000 cars
By Mint on 10/31/2013 10:07:30 PM , Rating: 2
30% of new cars sales are to people who earn over $100k/yr:

Even if Tesla got up to 500k car per year, that's less than 1% of the world market.

By flyingpants1 on 11/3/2013 12:05:15 AM , Rating: 2
You have a good point there. Sure you can make road trips with a Tesla vehicle, but for now they are a bit impractical. Stopping to charge is not such a big deal, I'd be more worried about getting lost, broken chargers, forgetting to plug in overnight.. etc.

People are really stupid. Once the Tesla BlueStar starts selling, I guarantee you within weeks there will be a flood of news about people needing flatbed trucks to move their Tesla because they (stupidly) ran out of electric range.

EV range anxiety will never be truly wiped out until an EV can do what a gas vehicle can do (quickly add 500 miles of range basically anywhere). There is only one solution to that problem: 300kWh superchargers everywhere . That problem won't be solved until 2020-2025 at the VERY least.

And until that happens, it's not sensible to overpay for a gigantic heavy battery. You won't drive more than 50 miles/day anyway, so you end up paying for thousands of extra battery cells and carrying them with you literally everywhere. If you do want to make the occasional road trip, it makes much more sense to carry an extra ~300 miles of gas, rather than ~150 miles of battery.

Go Tesla
By bigi on 10/31/2013 1:06:42 PM , Rating: 2
Tesla is hitting EU, especially GB and Germany.
Tesla is going to China which can buy crap loads of any price car you can imagine.

China is the top buyer of lexury cars in the world now.

Telsa is going to introduce 'mass market' car - 3rd gen one in 18-24 months.

Given the performance of their current Model S and "juice for free" option with Superchargers, I think Tesla will easily use twice as much batteries as ordered.

"If you look at the last five years, if you look at what major innovations have occurred in computing technology, every single one of them came from AMD. Not a single innovation came from Intel." -- AMD CEO Hector Ruiz in 2007

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