Tesla’s Massive Australia Energy Storage Project Will Use Samsung Cells

1 month ago by Mark Kane 37

Tesla

Tesla Powerpack to Enable Large Scale Sustainable Energy to South Australia

When Tesla won the largest ever energy storage tender for 100 MW / 129 MWh system in Australia (full details here), beating 90 other contenders, we thought at the time it would be a major order for Tesla Gigafactory batteries.

Tesla Powerpack 2

But as it turns out, the battery cells for the project will be supplied by another company – not Tesla/Panasonic or Panasonic (from Japan) itself, but Samsung SDI partnership between the two (talks of a , and the shipment of over million cells first popped up over a year ago).

“On a conference call hosted by Goldman Sachs for bondholders following Tesla’s new bond issuance earlier this week, Musk said that Tesla would actually use Samsung cells in the Powerpacks for the major project in South Australia, according to sources who were on the call.”

We assume that Tesla is focusing the Gigafactory production on the battery cells for the Model 3, and the capacity is not there to deliver much elsewhere.

The ESS project for Australia is definitely on an expedited schedule,  to be completed later this year; and any delay after the final governmental sign-offs will make the ESS free to the utility (and at huge loss to Tesla) because of the CEO’s guarantee of an install in 100 days or it’s gratis.  This timeline (and others like it) is likely why the decision to add in another vendor to the compay’s supply chain was made.

10,000 Model 3 with 80 kWh packs translates to 800 MWh capacity.

Tesla Powerpack rendering

Apparently, Samsung SDI will provide the cells – the 2170 cylindrical type (same type Tesla/Panasonic produces) – to the Gigafactory for the Powerpack assembly. Then it will be shipped to Australia.

We are not 100% sure whether Samsung SDI will provide batteries for the whole project, or just for part of the project.

Another company that intends to use Samsung SDI’s new 2170 cells is Lucid Motors, but obviously that company has yet to launch anything material.

In the past quarters Tesla delivered:

  • 98 MWh ESS in Q4’2016
  • 60 MWh ESS in Q1’2017
  • 97 MWh ESS in Q2’2017

source: Electrek

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37 responses to "Tesla’s Massive Australia Energy Storage Project Will Use Samsung Cells"

  1. Stephen Hodges says:

    Need to start building the next Gigafactory!

    1. zzzzzzzzzz says:

      Who cares about finishing the first one! The more vaporware projects, the better!

    2. georgeS says:

      @Hodges
      Why?
      Do the math.
      100Mwh is only 1250 model 3’s.

  2. DJ says:

    Seems like a smart move if they actually want to make the install on time.

    1. L'amata says:

      I think those Ozzies are going to do everything possible within their power to cause Tesla to get Delayed , So that they can get the project completed for free. I hope not., But ., It’s going to be a can of worms.I smell trouble here..

      1. Viking79 says:

        Free install, not free product. Still, installation is expensive for that sort of project.

        1. L'amata says:

          Thx , Good that you pointed that out …I thought the entire job would be Gratis….I should have realized & known better that Elon is much smarter than that…Duuuu…on my part …cheers

    2. Another Euro point of view says:

      “Seems like a smart move if they actually want to make the install on time”.

      Indeed however why accepting so harsh terms to start with (100 days) ?

      Idea of GF was that sheer volume of cell production would drive production cost down.

      Now they have a mega project in Oz and not using this opportunity to put their plan into action.

      What profit are they going to make by having to install this system in 100 days using cells not produced in GF ?

      No one knows but likely reply is no profit will be made because profits is just not the way Tesla operates. Operations are based on hype. Hype allows them to engage in non profitable operations but which generates more hype that in turns give them access to capital markets. If you notice, each time they need more cash they put forward one of their “new ideas”.
      It reminds me the movie “Wolf of wall street”, the NY restaurant scene in the beginning of the film with Mc Conaughey. “you have another idea, a special idea, another stock…”
      https://www.youtube.com/watch?v=wM6exo00T5I

      1. Another Euro point of view says:

        2’30” into the video…

        1. Mister G says:

          I really do not see the similarities between Tesla business and wall street firms? Tesla is an independent tangible manufacturing, energy, data business….wall street is a corporate welfare cartel funded by the taxpayer that tanked the global economy now known as the great recession. Please elaborate.

    3. SJC says:

      Save the cells designed for cars for the cars, general cells can be used for grid, a different application.

  3. tftf says:

    Biggest battery factory in the world (Musk just said that again) – but the cells for this project are coming from Samsung?!

    I’m sure PP (or other Tesla apologists) will explain it all…

    1. Mikael says:

      The rest of the cells are coming from Panasonic, a large majority being imported. So what is the big deal?

      There is a big difference between cells and batteries.

    2. Ambulator says:

      The battery for Australia probably uses a different chemistry than the cars do. It’s not impossible to have them come out of the same factory but it’s not easy, either. It looks like this was the plan all along.

    3. CDAVIS says:

      @tftf said: “Biggest battery factory in the world (Musk just said that again) – but the cells for this project are coming from Samsung?! I’m sure PP (or other Tesla apologists) will explain it all…”
      ———-

      @tftf has it backwards.

      It’s positive news to see that the very high demand for Tesla Energy products & services is not constrained by Tesla’s in-house battery production capacity. The TSLA short squize gets tighter!

  4. Another Euro point of view says:

    “The exit rate of cells will be faster than bullets from a machine gun…”

    Just maybe Australia is out of range of that specific machine gun ??

    1. L'amata says:

      These guys would like to see Tesla Mess up But they won’t ,, ha ha

    2. Ron M says:

      A couple months ago Tesla announced purchasing equipment for putting the cells into the battery packs. At the time this was being done by hand.I don’t know if that equipment has been installed yet but I thought the Gigafactory was already manufacturing all the cells they need.

  5. georgeS says:

    What?

    1. pjwood1 says:

      I know. The only thing missing from that headline is a snare, and high hat.

  6. Reno_Dave says:

    It should be noted that in Tesla’s 2014 10-K, which was published as the first four sections of GF 1 were being built, the company stated:

    “By the time the Gigafactory reaches full, annualized production in 2020, we expect battery pack production capacity to reach 50 GWh. Of this, we expect to build 35 GWh of cell production capacity at the Gigafactory and purchase 15 GWh of cells from other manufacturers, potentially including Panasonic.”

    The 35 GWh of cells produced at GF1 will support the production of roughly 420K Model 3 cars, so it appears to me that the plan was to have the Energy Storage cells produced elsewhere.

  7. Someone out there says:

    Interesting, this puts a question mark on the viability of the “Tesla Energy” branch of the company. Wasn’t the whole point of that to use the overcapacity from the Gigafactory for making stationary energy storage?

    1. Reno_Dave says:

      IIRC, the cell chemistries for vehicle and storage are different, and I don’t believe it’s an easy or quick process to change between them. Therefore, you need separate lines.

      Whether those lines need to be separated by 5600 miles is another matter 🙂

      1. Someone out there says:

        Yes different chemistries but the machines should largely be the same

        1. Reno_Dave says:

          Yes, the machines should be the same. I think that the issues would be:

          1) the risk of cross-contamination when switching from one product to another, and

          2) the downtime required to make sure that there will be no cross-contamination makes quick switchover too costly.

    2. pjwood1 says:

      Yes, but that was before 370,000 deposits came in. Straubel, I think, had been saying 50/50% cars/storage, when GF talk started.

      This sounds more like a “Genghis Khan” move, to be buying cell production from elsewhere on the planet, while your competition (like VW’s 20 bn Euro effort) is looking for it at the same time. I guess some things money can’t buy.

    3. unlucky says:

      I don’t get why this would undermine the viability of the division. Other companies in the energy storage market also use outsourced cells. I know Musk talks a mean streak about his vertical integration but there’s not a lot of financial advantage to insourcing something like this.

      They can compete just fine with the other companies in the energy storage business. This wouldn’t stop them from being a major player.

      1. cmina says:

        It could also be timing.
        I don’t know when this project started; it might be that they just weren’t able to churn out 129MWh in that particular time frame.
        There’s no reason to pass on this just because it ain’t all Tesla cells.
        So .. cheers Samsung!

      2. zzzzzzzzzz says:

        It certainly no problem and do not undermine the main business – blowing hype and raising capital for vaporware projects. How many capital raises “for Gigafactory” you have seen? I remember 2 or so, and tremendous amount of hype about gigantic “economies of scale”.
        Yet the factory has less then half of real estate completed, doesn’t need to produce anything significant for Model 3 yet, but doesn’t have capacity for a single storage project.
        Everybody keep believing!

        1. Mark C says:

          I think you should sell all of your Tesla stock so you won’t get burned when they inevitably fail.

          I’ll just keep believing.

          1. Mark.ca says:

            I’m pretty sure he already sold stock that he didn’t own…

        2. Chester Koenig says:

          So… You don’t believe in the scale of the Gigafactory? All you have to do is look at the output numbers to understand that there aren’t any false claims.

  8. Mark.ca says:

    It’s obvious they will have a hard time to keep up with the demand for the M3 batteries so seeing them outsourcing this job doesn’t surprise me. M3 is way more important to them so they will ensure most of their energy is spent on it.

  9. Mister G says:

    GO TESLA GO don’t become distracted by haters and naysayers

  10. john Doe says:

    I don’t see the problem here.
    Tesla needs more cells then they can produce at the moment.
    They are probably working at full speed, producing cells for the car batteries for the unexpected volume of M3s they’re going to ship.
    Samsung is a large manufacturer, and they can deliver the volume and quality Tesla need. Samsung and others are all expanding production, so Tesla have several companies they can source from. Since Samsung is used to produce high volumes of products for others – they are a smart choice.
    I’m sure it is not the last time Tesla will source batteries from others, if their power/grid business continues to grow at the rate it does. The share volume these large orders contain, will take time for GF to produce. As long as GF can produce cells for the EVs, and the PWs – they are all good.
    In the future, when they have expanded GF or build another battery factory, they can produce what they need.
    The GF is still under expansion right?

    As the world use more solar, wind and other clean energy sources – grid batteries are more and more in demand. I think the rate of change is so high that no single manufacturer is able to produce the number of cells needed.

  11. speculawyer says:

    “Apparently, Samsung SDI will provide the cells – the 2170 cylindrical type (same type Tesla/Panasonic produces) – to the Gigafactory for the Powerpack assembly. Then it will be shipped to Australia.”

    So they are going to ship a huge number of batteries from South Korea; to Reno, Nevada; and then to South Australia…and install them within 100 days?

    Uh…that sounds worrisome.

    1. DJ says:

      “Air freight. When it has to be there’s on time or you are doing it for free.” 😀

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