Who will be a battery supplier to Tesla’s Shanghai Super plant?

Panasonic CEO Kazuhiro Tsuga has reportedly publicly denied building a new battery plant for Tesla Inc(TSLA.US) for the Chinese company. “We have no immediate plans to build a production base for Tesla’s China operations.

Original title: Who will be a battery supplier to Tesla’s Shanghai Super plant?

Source: Daily Economic News

Who will be a battery supplier to Tesla's Shanghai Super plant?

Whether it’s a “Made in China” battery made by another manufacturer, or getting a battery from our Superplant 1 battery plant in Nevada, it’s up to Tesla. “About the joint plant rumors, Zinga Yihong made it clear.

The media pointed out that Mr Tsinga’s comments reflected Panasonic’s increasingcaution about its battery business, which is not yet profitable.

The issue of batteries at Tesla’s Shanghai Superplant 3 has been in the spotlight since it began construction. It is understood that the Tesla Super factory in Shanghai was completed in early November and is expected to start mass production of the Model 3 by the end of the year. As mass production approaches, who will supply power batteries to Tesla’s Shanghai plant seems to be a mystery.

Former “close friends” fade away

Panasonic is known to have been A tesla’s battery supplier. Panasonic will not only export batteries made in Japan to the United States to supply Tesla, but also deepen its partnership with Tesla through joint ventures. In July 2014, Panasonic announced an agreement with Tesla to invest in a plant in The U.S., gigafactory 1.

Tesla CEO Elon Musk once declared: “Gigafactory 1 is now the world’s largest, more productive than any other plant in the world.” “Public data show that Gigafactory currently has a one-year capacity of about 35GWh, and that the Tesla Model 3’s batteries and other energy products come from the plant.

At the beginning of the plan, Tesla aims to achieve 50GWh per year of battery production at gigafactory 1 plants by 2020 and 150GWh/year after all construction of the plant is completed, which will meet Tesla’s demand for 1.5 million electric vehicles. But as 2019 draws to a close, Tesla’s goal has not been achieved.

In January, with the start of construction at Tesla’s Shanghai plant, gigafactory 1’s expansion plan was already on the agenda. However, panasonic may plan to switch to making batteries locally as production at its Shanghai plant gets on track, according to the Journal of Industry News.

Behind panasonic’s hesitation, panasonic, a former ally, is that its partnership with Tesla has not brought it much revenue. In March, Panasonic and Tesla reported losses of more than Y20bn in their battery business, up from a year earlier. Panasonic’s losses widened as a result of the delay in Tesla’s production of the Model 3. For a variety of reasons, Panasonic’s announcement in early April that it would suspend its plans to continue investing about $900-$1.35 billion in Gigafactory 1 has strained relations.

Earlier this year, Mr. Tsinga also admitted that he underestimated the risks associated with working with Tesla. Panasonic reported a 12 percent drop in operating profit during the reporting period, including continued losses in its battery business with Tesla.

Difficult to choose or to think about?

In fact, the issue of battery suppliers at Tesla’s Shanghai super plant has been widely debated, because the local production of batteries is the inevitable choice for Tesla to develop in the long run. While Tesla has the option of exporting batteries from its Gigafactory 1 plant to China, costs such as transportation and tariffs are bound to push up Tesla’s vehicle pricing substantially, and the advantage of building a plant in China is gone, which is extremely bad for Tesla.

Panasonic and Tesla have been working together since 2009, and if Tesla wants to choose a battery supplier in China, Panasonic should be the preferred partner. However, Panasonic’s factory production line in China is limited and it is not yet possible to produce cylindrical batteries that fit Tesla’s electric car package. And with the suspension of Panasonic’s investment, the two sides have cracked. Based on this, whether Tesla will choose a new partner is bound to be the focus of the industry, its rumored talk of the subject of several rounds.

Back in January, there were rumors that Tesla had signed an agreement with Tianjin Lishen Battery Co. to supply batteries to Tesla’s Shanghai plant, which Tesla denied. Then, in March, there were media reports that Tesla was in talks with the Ninder era, which could be a partner in Tesla’s China business. But then, the Ningde era official also issued a statement of disinformation.

In addition to China’s domestic battery companies, other companies could also be partners with Tesla. Tesla is in advanced talks with South Korea’s LG Chemical Co Ltd to supply batteries for cars made at its Shanghai plant, it has been reported. At this point, and Tesla has passed the “gossip” of the object added another, it seems that the Shanghai super factory battery supplier identity really has a lot of attraction.

While talk of Tesla’s battery suppliers is hot, Musk seems to have his own thinking. It is worth noting that after the completion of the first phase of the Shanghai Super Factory project, the second phase of the project, located not far away, has also been put into intensive construction. Construction of the plant is already taking shape, but Tesla has not released any details about the second phase. Sources say the second phase of the Shanghai base project could set up a new production line for model Y, which will be launched in 2020, or that Tesla wants to build its own lithium-ion battery plant.

These speculations are not hollow. Since the beginning of the year, Tesla has been moving. Tesla reportedly bought Maxwell, the Us. energy technology company, for $218 million in February, and at Tesla’s shareholder meeting in June, Musk pointed out that Tesla’s launch was currently limited by battery production. At the time, Tesla employees also revealed that the company was developing its own batteries in a “secret lab” in California. In addition, Tesla has released a number of job-based job acquisitions related to battery design.

In October, Tesla acquired Hibar Systems, a company that specializes in high-speed batteries for electric vehicles, to help Tesla further develop internal batteries. Although details have not been disclosed, Tesla has reportedly listed Hibar Systems as a subsidiary in its filing with the Canadian government.

Tesla’s “ambition” for batteries can be seen through information such as its acquisition of battery companies, its own research and development, and its recruitment of core technology staff. Some analysts believe that Tesla is already laying out its own battery development business, Musk’s self-built battery goal may be about to achieve.

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