LG Chem Exec Says Tesla Gigafactory Will Drive Down Costs For All Battery Makers

3 years ago by Mark Kane 14

Tesla Gigafactory Rendering

Tesla Gigafactory Rendering

Giga Factory Graphic

Giga Factory Graphic

Prabhakar Patil, CEO of LG Chem Power Inc., was recently asked about the Tesla Gigafactory and said that not only Tesla Motors will benefit from such a large factory, but the whole battery industry will as well.

Production volume will go up, so costs will go down, especially for materials supplied by third-parties.

“It will drive up the volume in the industry for materials, and that will lower costs for everybody.”

LG Chem Power, as manufacturer of lithium-ion cells (mainly for General Motors), probably expects that it will be able to order materials cheaper and then offer its own cells cheaper due to the volume of the Gigafactory.

According to Patil, automotive battery makers (lithium-ion) are struggling to turn a profit. Their aim is in mass market and ramping up production.

“For most suppliers of lithium ion batteries — used in gasoline-hybrid and battery electric vehicles — profits are still a mirage. But that could change once Tesla begins manufacturing its own batteries.”

Well, sounds reasonable. In some way, competing manufacturers are helping each other by expanding the market.

Source: Automotive News

Tags: , , ,

14 responses to "LG Chem Exec Says Tesla Gigafactory Will Drive Down Costs For All Battery Makers"

  1. Lensman says:


    1. Mister G says:


  2. J Stuyts says:

    I never noticed this before, but dividing 50GWh of capacity over 500.000 cars equals 100kWh batteries!

    1. Zach says:

      15 GWh is supposed to go to stationary storage.

    2. FS says:

      Yeah, but they are not going to use all batteries to cars. Some will go to their solar storage battery packs.

    3. Speculawyer says:

      Tesla also uses batteries at supercharger sites to help reduce demand charges. Although that is probably a very small usage of batteries.

  3. Speculawyer says:

    That’s one way to make lemonade out of lemons.

    But he is right . . . building up the raw materials supply chain will definitely reduce prices for all.

    1. finecadmin says:

      “Lemons” are profit.

      Delphi, Visteon, etc. were spun off of GM, Ford, etc. so they could also sell to Ford, GM, etc. Here, LG might not be selling to the entire car industry. But they are seeking phone, laptop, camera, etc. orders.

  4. Stimpacker says:

    Now where was that PhD guy who published a report stating that it is impossible for the Gigafactory to achieve the savings Tesla is claiming? Amazing the sort of reports so-called investment analysts can produce these days…..

  5. Illuminati says:

    Someone at Texaco told me that it is too early for EV and the Gigafactory is a bad idea. And someone at Exxon told me that Tesla is fucked up if Elon Musk dies in a car accident…

    1. Mister G says:

      If something does happen to Musk, fossil fuel industry would be a primary suspect.

  6. raffi12 says:

    I’m betting they’re scoping out the location for Gigafactory #2.

  7. Steven says:

    Pardon my Dumb, but isn’t that the idea?

  8. Mister G says:

    Fossil fuel industry would love to destroy GF.