UPDATE/Confirmed: LG Chem Inks Battery Deal With Tesla

OCT 28 2015 BY ERIC LOVEDAY 94

LG Chem Lithium-Ion Polymer Battery Cells

LG Chem Lithium-Ion Polymer Battery Cells

LG Chem 18650 Cylindrical Cell - 3500mAh

LG Chem 18650 Cylindrical Cell – 3500mAh 10A 3.6V

According to Asian news organization Nikkei, one of the world’s leading automotive lithium-ion battery suppliers, LG Chem, is “in the final stage of negotiations to supply lithium-ion batteries to U.S. electric vehicle maker Tesla Motors.”

Even if the deal is inked, Panasonic will likely remain a major supplier for Tesla, but by adding LG Chem into the mix, Tesla will secure its supply chain and be able to pick and choose from the batteries available from each supplier.

***UPDATE: Tesla has confirmed that it signed a deal with LG Chem. The deal is linked to the Tesla Roadster and its 3.0 battery upgrade.  The Wall Street Journal is reporting on the confirmation of the deal, stating:

Tesla Motors Inc. confirmed Wednesday it has a contract with South Korean battery maker LG Chem Ltd. for upgrades to the company’s first car, the Roadster, which has since been discontinued.

Earlier this year, Tesla began offering a $29,000 upgrade to original Roadster customers to replace the battery in the vehicle with a new pack and make other improvements. The new pack bumped up the range to around 400 miles, a 35% increase. Those upgrades are continuing today.

LG Chem’s automotive expertise is in pouch cells, a format that Tesla CEO Elon Musk is against.

However, LG Chem does make 18650 cells that are nearly identical to the currently Panasonic-supplied cells found in the Tesla Model S.

Nikkei focuses mainly on the impact this deal could have on Panasonic, stating:

“This could deal a major blow to the Japanese electronics giant, which positions the automotive business as a growth pillar, because now it will be exposed to competition in serving a key customer.”

“Panasonic currently produces the electric-vehicle batteries for Tesla in Osaka Prefecture. The two companies are also building a massive battery plant in the U.S. state of Nevada. The $5 billion facility will be completed in 2020, with a portion of the plant to go online next year.”

“Panasonic is the global leader in automotive lithium-ion batteries, with a 46% market share, followed by 17% for Automotive Energy Supply — a joint venture of Nissan Motor and NEC — according to research company Techno Systems Research. LG Chem comes in third with a share of 11%.”

Tesla Illustrated Battery Volume Needed In 2020 For Model 3 If Everything Goes As Planned

Tesla Illustrated Battery Volume Needed In 2020 For Model 3 If Everything Goes As Planned

Recently, LG Chem has won numerous battery contracts and has become a key supplier for the upcoming Chevrolet Bolt.

Nikkei adds:

“…LG Chem supplies to more than 20 companies, including General Motors and Renault, and delivery under many contracts has yet to go into full swing.”

“On Tuesday, a new LG Chem facility was completed in Nanjing, China, becoming the company’s third battery plant after sites in South Korea and the U.S. Combined annual production capacity has increased 40% to the equivalent of more than 180,000 electric vehicles.”

 

Source: Nikkei, WSJ, Hat tip to Brian for update/confirmation!

Categories: Battery Tech, Tesla

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94 Comments on "UPDATE/Confirmed: LG Chem Inks Battery Deal With Tesla"

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IMHO if Tesla wants to survive through the next 36 months they probably should get (discretely) rid of both the Model X and the GF. Thus dedicating right away 100% of their resources on producing the Model 3. Just saying.

The X is already developed, why not collecting the money they put into the development?
GF is not just one building, and having a small factory close by isn’t bad, especially if its able to grow really big.

How do you make the model 3 without the gigafactory? That doesn’t make sense to shut it down, its other people.

A year ago shutting down model X and concentrating on 3 might have made sense, but the 3 needs the cost and volume of the gigafactory which would not be available. Now the model X should be cash flow positive, and developers have moved to the model 3. They need to fufill and profit from all those model X orders.

European point of view

1000 pc agree with PVH

That’s because you and PVH both haven’t the faintest clue what you’re talking about. The whole PURPOSE of the GF is to make the Model 3 possible; without it, there’s no way they could sell the car at the $35,000 pre-incentive mark in quantities of 500k+.

– economies of scale
– more control over production process
– able to support growing demand
– able to turn a profit in its own right
– supports their home storage solution

While I like GF, I’m not sure what you say about needing it for 3 is true. Bolt is to cost similiar with similar range, far fewer (at least that’s how it seems) using LG battery. With economy of scale for model 3, using LG battery might be better.

I suspect GF is investment for other things, such as future of battery technology not only for EV, but everywhere else power is used.

Yes but there is no guarantee that LG will be able to provide the volume Tesla requires. In fact, it’s very unlikely. The world needs more battery factories, Tesla owning one of them is not a bad thing.

Tesla need 500,000 batteries for model 3, GM has a target sales for Bolt of 30,000 so need for batteries is less than 1/10 of Tesla

You are comparing apples and oranges. Musk vision is to sell half million Model 3 in 2020 only (most likely later actually). Bolt’s 30,000 production target is planned for first year, 2017. It is not always a good idea to launch new car at full volume, because any new products are likely to have issues and warranty claims may kill you. Launching small is more reasonable approach, and you don’t know how successful Bolt will be and what production it may reach in 2020 or later. You may have second generation Bolt by that time and many more than current 3 LG Chem factories around the world. If you believe GM battery price leak, LG has made serious progress now and is not going to let Panasonic/Tesla to take battery market away.

SparkEV said:

“While I like GF, I’m not sure what you say about needing it for 3 is true. Bolt is to cost similiar with similar range, far fewer (at least that’s how it seems) using LG battery. With economy of scale for model 3, using LG battery might be better.”

It’s amazing how many people don’t understand the most important reason that Tesla is building Gigafactory 1. It’s not to reduce the price of batteries; it’s to guarantee the very large supply of battery cells they will need. Battery prices are coming down anyway; Tesla could have counted on at least half the planned price reduction just from normal year-on-year industry improvements.

And no, depending on LG Chem to supply Tesla would not be a good plan. Demand for LG Chem’s new, cheaper cells is growing much faster than they can ramp up production. LG Chem’s customers will be competing for a limited supply. Contrariwise, Tesla can use as much of the output of Gigafactory 1 as they need.

It never fail to amaze me how people look at today and think it’ll stay the same forever regardless of the demand. It reminds me of, gee, I don’t know, gas car bigots?

Your assumption that LG (and others) will not ramp up is based on what? Even if Tesla starts building Model3, they won’t need batteries for 500,000 cars overnight. Even if they need signinicantly more than Bolt, which I doubt in early days, they can contract their schedule, and demand can be met, especially Tesla known for delayed production schedule.

In fact, GF is detrimental to core car business; why spend billions and carry inventory, etc? Tesla has bigger and better things in mind, which I wholeheartedly applaud them for.

SparkEV

“Your assumption that LG (and others) will not ramp up is based on what?”

You’re not seeing the big picture, at all. LG Chem is ramping up right now. In fact, there’s a current article right here at InsideEVs about a new plant, with speculation on who the intended customer is.

But the Gigafactory is intended to produce a volume of li-ion batteries equal to the entire global output in 2013! Do you honestly think that LG Chem will ramp up fast enough to provide that much volume by 2020, plus be able to supply all its current — and rapidly growing — list of customers?

Keep in mind that as big as LG Chem is, it’s still only the #2 supplier… behind Panasonic. Panasonic hasn’t been able to ramp up battery production fast enough to satisfy Tesla’s demand, so how could you actually think LG Chem can do so and supply everyone else?

Apply some critical thinking here, SparkEV.

GF is badly needed and to be ready it has to be built now. Not just for Tesla cars but also home, building, etc battery
packs.
And Panasonic doesn’t make their batteries for Tesla, they make Tesla’s batteries that are seriously different to lower costs, etc and patented.
Likely Tesla wants a second source and LG likely will build Tesla’s cells too.
And Tesla supplies much of the
materials.
With the GF Tesla can bring in anyone or tech he wants if something better comes along.
Fact is before long he’ll have to build another factory and possibly the LG is to run one in China for the 3 production
there.
Personally I could sell several Mwhrs of them if I could get them to sell to me in a few weeks for both repowering older EV’s of which there are thousands and home, small business off/on grid power systems.
On Panasonic if Tesla cut back could just move to home, building power batteries which market is about to explode.

Worst idea ever! All the development costs put into the X is now about to pay off, once it gets into serious production. Cancelling it now would be madness! You would still have the costs but nothing to cover them.

The Gigafactory is essential for producing enough batteries for the 3. If you cancel the Gigafactory you also cancel the model 3.

Indeed.

In addition, the Model X is now Tesla’s “halo car”. Canceling it would reduce Model S sales, too.

That’s an idea right up there with New Coke. 😉

What? The Model X bring in money now it’s done, sells at a decent margin like the Model S. The GF is already well progressed and is needed for the Model 3.

Has Elon hired you for your business acumen?

Take the hint.

In an earlier article JB said that that the Tesla gen 3 would have a new battery “architecture”.

I suggest this new architecture would consist of a new cooling scheme. LG has already submitted a patent for this new cooling scheme that eliminates glycol as a coolant and just goes with straight freon.

http://gm-volt.com/2015/06/22/the-chevy-bolt-battery-pack-possibilities/

This new pack design also uses low profile prismatic cells that pack well into the floor .

Doesn’t the i3 already use straight freon to cool the battery?

GeorgeS “In an earlier article JB said that that the Tesla gen 3 would have a new battery “architecture”.”

Musk has stated that the ideal cell for Tesla’s cars would be 10% taller and 10% wider than current 18650’s, and have about 30% more capacity per cell. I suspect this may be what JB is referring to.

@jim NJ

yes I believe they are 22700’s…..however JB said “architecture” not “cell”. To me architecture refers to the pack design.

I suspect they are looking to simplify the battery thermal system so that it is cheaper to produce. The current system is pretty complex.

GeorgeS said:

“…JB said ‘architecture’ not ‘cell’. To me architecture refers to the pack design.”

We can only guess what he meant. Googling [battery + “cell architecture”] yields “about 26,500 results”. Looks like that description isn’t very common, but it does exist in the industry, and it could be what JB meant.

In any case, both the cells and the packs used in the Model ≡ will be new designs, so in that sense both will have new “architecture”.

I believe in the i3 the cells sit on a cooled mat. but I’m not sure if it is glycol cooled or freon cooled.

@2013Volt

Looks like you are correct and the i3 does use refrigerant as the primary coolant, not Glycol just as I suggested above as a possible new cooling “architecture” for model 3 in addition to low profile prismatic cells.

http://insideevs.com/impact-temperature-bmw-i3-battery-performance-video/

There is no “just”; cooling the battery with a compressed refrigerant system represent a significant shift toward greater complexity and more energy required to remove the heat, over an EGW-pumped system. It is something you do only if absolutely necessary, such as designing for extremely high ambient conditions (>50C).

@unbiased

actually straight refrigerant results in a smaller more efficient pack design since you have eliminated the intermediate glycol cooling loop with its inherent heat exchanger inefficiencies.

Running an air conditioner takes a lot of power. Running a pump to circulate antifreeze requires a lot less.

Tesla also packs “goop” in between the cells, so there’s at least some amount of passive temperature control. (As I understand it, the goop is also a fire retardant.)

In my opinion, for Tesla to move away from a radiator-cooled coolant pump system to an actual refrigeration system, for battery pack thermal management, would be a step backwards, and would waste a significant amount of the battery pack’s energy.

Freon? Isn’t that illegal?

No. Or all refrigerators would be busted.

Freon is whatever its trademark holder says it is. In particular, new sales are no longer CFC-12.

That’s what I thought, as well – but, apparently, according to the other replies, “Freon” is a trade name, not necessarily an indicator of composition. CFCs have been banned in the US for a long time.

Only R-12, most cars today use R-134.

Any chance LG could just buy Panasonic?

No way LG has that kind of money to buy Panasonic. They are a larger company in both sales and assets over LG, I think the worth split is something like 80b for Pana and 50b for LG from the last Forbes list. Would need to double check a current list.

LG couldn’t buy all of Panasonic, but I am sure they could buy their battery division.

Not sure why Panasonic would want to sell it though.

Yep, as far as I know, the EV battery contracts are all that’s keeping the company afloat.

2014:
LG US$143B revenue, US$11.47B equity
Panasonic US$64B revenue US$13.16B equity

LG larger revenue, but Panasonic higher worth.

Korean and Japanese companies don’t buy each other.

kdawg said:

“Any chance LG could just buy Panasonic?”

The minnow swallowing the whale?

Looks like some people here forget that Panasonic out-produces LG Chem in kWh of battery cells, by a large margin. And who is Pansonic’s #1 customer? Oh, yeah… Tesla.

Now, with LG Chem’s new cheaper battery chemistry, it’s very likely they’ll overtake Panasonic in production in the coming years, if you don’t count Gigafactory 1. But LG is going to struggle to keep up with rapidly growing demand as it is; supplying Tesla and Model ≡ production will almost certainly be far beyond their capacity.

Second source is always a good idea, unless that pisses away “friends with benefits” relations of the first sourse. I wonder how Panasonic feels about this.

I’ve been surprised at how openly Tesla has been pressuring Panasonic over the past few years, first to ramp up battery cell production, and more recently to invest billions of dollars in building Gigafactory 1. Tesla has more than once openly courted Samsung to be a supplemental supplier of battery cells, because Panasonic wasn’t ramping up production fast enough to suit Tesla.

If all that hasn’t caused Panasonic to pick up their marbles and go home, this deal with LG Chem for a relatively tiny number of batteries for the Roadster upgrade almost certainly won’t, either.

Far more interesting to me than a deal for what is, for Tesla, a small number of cells, is the possibility that Tesla might license the chemistry and/or cell structure for LG Chem’s new, cheaper cells… as apparently Daimler-Nissan has done. But even if they do, even if Tesla decides to use LG Chem’s recipe for Gigafactory cells, I doubt Tesla is going to suddenly “switch horses in mid-stream” and dump Panasonic in favor of LG Chem as its partner in building Gigafactory 1. I think plans are too far along in Gigafactory 1 construction for that to happen.

Good idea, even if they don’t use that many cells from LG, it’ll keep Panasonic from “going Russian”[1] on them. If the cost for the 18650 is close to the $145/kWh for the prismatic module that GM is using, then I wouldn’t be surprised for these cells to go into the Tesla Energy products to get them out at a lower price.

[1] http://www.esquire.com/news-politics/a16681/elon-musk-interview-1212/ (about 1/2 way down)

Reply to my post since the confirmation:

A good way to start a partnership – by going low volume they can keep LG around as a supplier. If the cells work well, maybe they get space in the GF to manufacture cells.

My thoughts exactly. Or – could this be the first tiny seed for Gigafactory #2?…hmmm…

It has to be good for Tesla to have a second battery supplier to keep Panasonic honest. This, albeit a very small order could lead much better things in the future.

Could this be the “mystery” line LG just announced it’s building at Holland, MI?

James asked:

“Could this be the ‘mystery’ line LG just announced it’s building at Holland, MI?”

I thought of that too, but I doubt it. Tesla’s need for cells for Roadster upgrade packs will be quite limited, and will end soon. You don’t build a factory for that. I also can’t see Tesla using LG Chem cells in its PowerPacks or PowerWalls. The reason Tesla wants to market those is to create a secondary source of demand for cells produced by Gigafactory 1. Paying LG Chem to supply that market makes no sense in light of Tesla’s long term goals. Nor would it make sense from LG Chem’s viewpoint, since LG wants to supply that market itself.

This may also free resources, to compete more in the storage space. I have this stigma in my head, that stationary storage must be cheaper because it can be heavier. But who sells these batteries cheaper than $145/kwh, with the cycle life of lithium?

Could be that the overhead costs of wiring all those small batteries together costs too much for a sub $100K vehicle and that this deal is part of the Model 3 development process.

That would be my guess. Hard to imagine Tesla switching out the small cells for pouch cells on the Model S and X. Would be a very expensive exercise with limited benefits.

If this deal is for pouch cells, then it’s likely to also cover other things such as power electronics. Would save Tesla time and development cost, two things it doesn’t have in abundance.

Tesla is leading in cost, cooling efficiency and fire isolation, all specifically because of the cylindrical format and how they utilize the geometry at the pack level. In fact, for the next generation, they already said that they will be using larger, but still cylindrical, cells.

In their own minds sure. But objectively is another matter. If GM is at $145/kWh for the cells it’s highly likely Tesla is not the low cost leader. The expense of care and feeding thousands of cells is why all the major manufacturers prefer fewer larger cells and why they haven’t been interested in licensing Tesla’s technology.

The $145/kWh which GM is paying LG Chem is only one part of a package deal in which LG is supplying a lot of electronics to GM for its Bolt. In other words, that $145/kWh price doesn’t mean all that much. LG may be making up for a very low profit margin on batteries with a much higher profit margin on selling electronic systems to GM. It almost certainly means that LG Chem’s cost for making the cells is less than $145/kWh. But LG Chem may be selling cells to GM at a price not much above cost. As far as your assertion that other EV makers have battery pack tech that is superior to Tesla’s, that’s at the very least debatable. Many industry analysts think Tesla is leading the field. Certainly Tesla’s packs — both the Roadster and the Model S — have experienced much less loss of capacity over time than expected. But we really don’t have sufficient information to compare prices Tesla is paying to prices other EV makers are paying. The price GM is paying to LG Chem was apparently leaked by mistake, and we have no other definite prices to compare them to. We don’t… Read more »

As an investor, i am very pleased with this news.
One less supply problem solved.

“As an investor, i am very pleased with this news.”

An an INVESTOR in a company selling @10x revenue with double-digit negative operating margins, you should be thinking about how this (LG cells being interchangeable with Panasonic’s) is just further proof that Tesla has absolutely nothing meaningfully proprietary (i.e., no “economic moat” to support its absurd stock valuation).

The “moat” is the stranded assets, and product cannibalism, facing by the other auto-makers.

That seems like a weird spot to fault Tesla.

We’ve always known that they use ordinary 18650 cells.

In fact, that’s part of Tesla’s magic. The use of commodity cells let them tap into the global market for the cheapest cells when they were getting started.

Yes, and cylindrical cells are easy to cool/heat.

Well Mark, as a professional stock manipulator personally short on Tesla you certainly have nothing to offer to the discussion except your inherent conflict of interest in spreading FUD.

But got to hand it to you, not only are you willing to sell out the most exciting new technology American company on the brink of major worldwide success.

(Tesla is after all close to unseating Mercedes S in their home turf of Europe) http://insideevs.com/tesla-model-s-sales-just-behind-mercedes-benz-s-class-in-europe/

You are likewise willing to sell out everyone on the planet by attacking a historic environmentally positive company that is making positive change.

You are in the same boat as the financial D-Bags who crashed the world’s economy in 2007, you must be proud of yourself!

+1

+1,000,000!

@Get Real:

Well said, sir.

It’s a shame that InsideEVs allows professional stock manipulators to post FUD here. The FUDsters can post their garbage at stock investor sites such as Seeking Alpha and Motley Fool. Allowing them to pollute the discussion here reduces the value of reading InsideEVs.

We have considered some kind of policy change to our comment system when it comes to Tesla and the undercurrents caused by the repeating pounding of a singular point over and over by individuals in way too many threads.

Not specifically because of Mark’s comment above, because he is actually reply to someone talking about Tesla honestly as an investor, but just due to the huge influx of Tesla comments that sometimes pop up, and are way off topic to the article…and as you say makes the discussion a little choppy.

We probably should have already moved on it, but our policy of having an extremely open forum to basically agree, disagree, link, share on anything (provided it is civil/EV related) that we don’t moderate would be cut down a little in the process.

I will say over the last week (and actually in this thread a few times) we have been actively hacking down a lot more of the fringe, “no value at all” comments/slight attacks that we didn’t used to.

Don’t mean to isolate a particular poster, but there are are few here that post so many responses to a single article that they make nearly 20% of the comments. That flooding habit should be considered too.

I for one certainly applaud such consideration(s) Jay as wading through the ‘drivel’ to get to anything of value has become tiring of late. I certainly understand and respect the desire and need to remain open with a ‘hands off’ approach to encourage multiple view points. However, when one or two posters continually hammer or make up the majority of posts on a single article it becomes intolerable and I simply hit the back button rather than suffer through the back and forth bravado. Therefore, moderate as necessary with my thanks!

Nothing, no moat, except they make the best car in the world, and it has no competition.
I said a year ago you should reexamine your prejudice towards Tesla. One reason I don’t buy or sell stocks I love or hate, your emotional brain interferes with your logical thoughts.
Besides you have a bit in the recent run-down of Tesla, so take little off the table,
don’t get greedy. Actually in the bigger picture, the shorts are really needed in the market. They are bigger risk takers. So for that I salute them, just don’t want to be them.

I accept that short-sellers are a necessary part of the stock market. I do not accept that websites which encourage reasonable, thoughtful discussion… websites like InsideEVs… should be subjected to posts from them filled with FUD, truth-twisting, and outright lies.

If they want to try to manipulate stock prices, there are websites and forums for that crud. InsideEVs shouldn’t be one of them.

“Tesla has absolutely nothing meaningfully proprietary”

Well sure . . . that was by intention. They have freely licensed others to use the technology covered by their patents.

However, they still have plenty of commercial advantages. They have a great brand now. They have built components that are working well. A HUGE advantage they have is the Supercharger network that no one else has.

Mark B. Spiegel said:

(Paraphrasing) I hate Tesla! Sell your TSLA now!!

* * * * *

It’s a very good day when a deal makes the Tesla haters mad, and the short-sellers to gnash their teeth and pull out their hair.

GO TESLA!

🙂 🙂 🙂

Using standard size 18650 cells in Tesla battery packs has several advantages. Tesla can source cells from several suppliers. It might even suit Tesla to source cells regionally in future as it scales up production to 500,0000 per year. Panasonic could supply USA & Japan. Lucky Goldstar could supply Korea & Europe.
Tesla is negotiating to assemble Tesla cars in China to avoid import duty & qualify for local EV incentives.
Who will supply cells for Tesla in China?
Could Tesla maybe even source cells from rival Build Your Dreams (BYD)? Remember BYD was a large battery-manufacturer that bought a small automobile company to diversify into buses & cars.

Chip asked:

“Could Tesla maybe even source cells from rival Build Your Dreams (BYD)? Remember BYD was a large battery-manufacturer that bought a small automobile company to diversify into buses & cars.”

It made sense for Daimler and Toyota to pay Tesla to supply a relatively small number of battery packs for EVs to be sold in small numbers; that helped Daimler and Toyota to avoid development costs. Similarly, it makes sense for Tesla to pay LG Chem for battery cells — and maybe even entire packs — for the Roadster upgrade; again, to avoid development costs.

But for high volume production, such as supplying cells for the Model ≡, Tesla will no more pay BYD for battery cells than Ford pays GM to build its gasoline engines. No company exec in his right mind would make his core products dependent on a rival supplying key components.

I wonder why Tesla is not in favor of pouch cells. The cylindrical form factor was a legacy from torch lights, which had cylindrical bodies.

I believe the reason is that cylindrical cells perform better with thermal management due to the greater ratio of surface area to volume than pouch cells.

In other words, the round ones can be cooled easier than pouch cells.

surely that’s not correct. A cylinder (or better still a sphere) has the lowest ratio of surface to volume. Even a square section is more, and a flat pack has much more.

True. The advantage, from Tesla’s viewpoint, of the round (cylindrical) shape is that it makes it easy to stack the cells in such a manner that it leaves a certain amount of space between them; space needed for heat dissipation, and space to pack in “goo” which acts as a passive heat sink and is a fire retardant.

Cylindrical cells also have a rigid “can” structure, so the cells won’t flex inside the battery pack, and don’t need much additional support structure.

Looking at a disassembly of a TEsla Model S pack, it looks like all the 18650 cells need is some thin dimpled sheets of plastic, on the top and bottom of the groups of cells, to hold them in place. Contrariwise, with the pouch cells Nissan uses, a lot of additional structure is needed to support the cells and, I suppose, prevent the pouches from flexing to the point of failure (source 1).

Source 1:
https://transportevolved.com/2014/12/04/nissan-makes-electric-car-battery-packs-part-three-three-cells-cars/

The advantage of the battery packs are due to cost reason and lower complexity of cooling requirement.

Of course, it also fits nicely below the floor of the car as they are about 3 inches in thickness.

But from a best possible cooling design, the plate design of the Voltec battery system are far superior. It is also rigid due to reinenforcement provided by the plates in between. What you giving up in trade off is the size and packaging issue which won’t fit nicely under the floor. if the same design are shaped into a flat design, then the routing of the cooling pipes and plates wiil be far more complex and require addtional support structure.

So, Tesla approach optimized for space, complex and cost where Volt design was focused on the battery thermal protection while sacrificing the complexity, cost and packaging.

Tesla battery has lower C discharging rate than Volt battery so it doesn’t need as much cooling on per cell basis as the Volt.

Volt: 16kWh for 112kW is 7C

P85: 85kWh for 310kW is 3.65 C
P85D with L-Mode: 85kWh for 568kW is 6.68 C

I would wager that cylindrical geometry allow for faster cool down without any need for constructing such barriers.

On top of that cylindrical geometry should allow for spreading forces in all directions when battery is growing.

Last but not least. Cylindrical is really common. Right for gigafactory they could go flat, but for anything right now? Cylindrical is more common and thus cheaper!

I think you have that backwards. The cells were cylindrical so that’s how they made the lights.

Musk has always been in favor of the cylindrical formats for several reasons, some of which include:

1) efficient cooling
2) isolation from adjacent cells
3) cheap, cheap, cheap!

#3 is the main reason. The rest aren’t true.

plate format is far better in cooling as it has far greater surface area to volume ratio which allows greater dissipation of heat.

A “plate” or block form factor (shape) would require spacers between each cell and the next, to allow for heat dissipation. Stacking block-shaped cells right next to each other, with no space between, leads to cascade failure in the case of any single cell overheating, which is what caused the battery fires in Boeing’s Dreamliner.

Contrariwise, the Panasonic/Tesla cylindrical 18650 cells can be easily stacked together, needing no spacers. Looking at an article about assembling the Leaf’s battery pack (link below), my guess is that Tesla packs can be assembled much more easily and quickly, despite the greater number of cells. Of course, Tesla still has to solder two wires to every individual cell, and add a fuse, but the extreme precision and repeated measurements required to align the Leaf cells, as they are made into stacks, would appear to be unnecessary in a Tesla pack.

https://transportevolved.com/2014/12/03/nissan-makes-electric-car-battery-packs-part-two-three-building-battery-cells/

How is what you wrote having anything to do with my point that lower cost and complexity is the main reason for using the 18650 cells over the large format cells? The concerns you stated are easily taken care of by GM engineers using a far better design than Boeing did. If you actually compare the Tesla design (as in the case of eRav4) with the Volt design, Voltec battery actually has better cooling in terms of cell temperature gradient. The Tesla cells are stacked vertically and heat tubes are sandiwiching the cells by rows. So, the contact surface is only fraction of the entire cell surface. There is a very small temperature gradiant between the contact surface and the surface between the cells. There is also another temperature gradient between the center of the cell and surface of the cell. In the large format cell pack of the Volt. Each cell is sandwiched by heating/cooling plate. There is very little to virtually none temperature gradient across the cell. With the low thickness and large surface area, it actually has one of the best dissipating capacity. The downside is complexity and cost. But the application requires it since the Volt… Read more »

The timing of this is interesting… Will Tesla now negotiate for the same deal (or better) since GM blabbed what they were paying LG? : D

Based off of all the looking around the internet at the stories about how a lot of places are buying up Tesla Power Walls for solar systems. I think Tesla could easy devour up a lot of these company’s battery capacity up in solar power walls alone.

Seeing the update, I find it funny everyone above that expected this meant Tesla has abandoned their gigafactory and is going the same route as GM.

In case everyone forgets, Tesla already had a similar supply deal with Samsung SDI:
http://insideevs.com/tesla-motors-discussing-battery-supply-deal-with-samsung-sdi/

This is simply Tesla filling up any supply gaps they have (in this case the Roadster cells). A core advantage of going with 18650 is it allows them such flexibility in selecting suppliers.

This has no bearing on the gigafactory (other than a chance Tesla can pull LG Chem into investing money into it) and it certainly won’t end it.

This relationship is probably all for the Roadster refit offer. No impact to existing production.

That was my first thought too.

To all the day traders and people out there and those who consider themselves “playing the stock market”, what separates you from someone who just goes to Vegas to gamble? What happened to making investments? Short-sellers and stock manipulators are just sad people trying to make a buck on a longshot or gamblers who think someday they’re gonna “hit it big!”….

That is an often held view. I take a bit more of a circumspect look at the markets. Takes all kinds to make a world and a market too.
Though I certainly take a dim view of certain practices, some illegal some merely unethical.

Agreed. There is no difference, except that the only people hurt by gambling are the people who do the gambling. But these short sellers and other whores are not investing in a company – they are gambling, and destabilizing the stocks and the broader markets in the process.

If it were up to me, the loophole that permits these short-term traders to take advantage of capital gains tax rates would be slammed shut on their ignorant, greedy faces.

I do not agree with this.
“In the short run, the market is a voting machine but in the long run, it is a weighing machine.”
What short sellers do most of the time is just reduce the time frame between the two. In the case of Tsla. Banksters use this stock as a milking machine aimed at gullible retail investors. Short sellers are needed to point at the unconvenient truth ( underlying financial figures) or, if you prefer, to tell people at some point that the emperor has no clothes. In the case of tsla, even Musk agreed with shorts as he mentioned that the stock was trading too high, it is an unhealthy situation. It would be much better for tsla to trade at $60 and slowly build intrinsic value according to fundamentals.

Gamblers have better odds because you only pay commissions when you win.

Looks like a smart move on Tesla’s part. By using LG Chem’s cells to supply the Roadster upgrade, they don’t cut into the supply of Panasonic cells they need for Model S and X production.

This deal may also be a not-so-subtle threat to Panasonic, sending a signal: “If you keep dragging your feet about making the investment we need to build out Gigafactory 1, then perhaps we’ll partner with LG Chem instead.”

This deal probably also gives Tesla access to LG Chem’s newer, cheaper cells, which Tesla can closely examine in their own battery cell analysis lab. There might be some innovations there which Tesla can use in Gigafactory 1.

humbly offer Elon’s quote “send us a battery”
LG did and the preliminary due diligence is done, time to Beta test them for myriad issues and lifespan, Roadster is perfect for that.

agree on powerwall musings, and also how much easier it will be to use LG for China production of Model E.. (China and Japan continue to have “is-sues”).

like so many Tesla things past, looks great in theory, and leverage with Panasonic is probably wise.