Samsung SDI “Making Progress” In Battery Contract Talks With Tesla

JUN 8 2016 BY ERIC LOVEDAY 14

Tesla Model 3

Tesla Model 3

Bill Of Lading

Bill Of Lading

Samsung SDI is reportedly “making progress” in talks to be a battery supplier for Tesla Energy battery storage products and possibly the Model 3 too.

That’s according to “a source with direct knowledge of the matter.”

Automotive News adds:

“Tesla, which procures its batteries from Japan’s Panasonic Corp, is likely to add Samsung SDI as a supplier should sales exceed expectations, the source said, although he declined to specify what level of sales would clinch a deal for the South Korean company.”

Recently, we exclusively confirmed that Tesla Motors took delivery of a massive quantity of Samsung SDI cells, which leads us to believe that some deal has already been struck.

What we do know (via Elon Musk) is that this supply deal would not involve Tesla’s EVs today (or the Model 3), so perhaps  for Tesla Energy or a future EV project.

However, neither Tesla nor Samsung SDI will officially comment on this matter as the discussions are confidential and a third party (Panasonic) likely has no knowledge of the details of the deal or potential deal.

Source: Automotive News

Categories: Tesla

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14 Comments on "Samsung SDI “Making Progress” In Battery Contract Talks With Tesla"

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Seems to be conflicting stories regarding Samsung’s Model 3 battery participation ?

http://uk.reuters.com/article/us-samsung-sdi-tesla-idUKKCN0YU0ML

Musk only mentions Model3 in his tweet, that leaves the door open for other products:

Panasonic = M3, S, X

LG = upgraded Roadster

Samsung = ESS / buffer storage (at least rumored given specs)

What’s funny about this is that all other car makers get their cells (but in a different format) from the exact same Asian suppliers.

– So where’s Tesla unique battery tech?

– Where will be their economies of scale in 5-10 years since LG has contracts with the world’s biggest car makers and Panasonic only supplies cylindrical cells to Tesla.

One wonders if at some point in the future that the gigafactory will not house the whole operation lock, stock & barrel to maximise the economies of scale ?

For the battery pack, yes, that’s the whole point: raw materials and old packs go in, new packs come out. It’s all supposed to be done there.

Panasonic (Sanyo) is suplying prismatic cells for VW e-UP! and e-Golf.

That’s why I wrote cylindrical cells above.

Panasonic also has other car clients, that is true.

However, economies of scale also depend on smae product liens.

A lot depends on how much capacity the other car makers are buying. So far, there are no firm plans for large amounts of capacity. There’s only one GM that’s going to make a large-battery BEV, and it’s not planning on making many, with vague talk of being able to make “over 50k per year” if there’s demand. Note that 50k x 60kWh per year is less capacity than Tesla is _already_ purchasing.

Plus, on cost, the other car makers are using a different format, and we don’t yet know how the overall costs will work out.

And all the other large car makers signed contracts with LG Chem back in 2012-2015 just for fun?

GM is just the first to come to market with their Bolt, others will follow in the coming years, that’s why they signed the LG contracts.

And we have no details of that MOU they signed with the supplier of their HEV and PHEV cells.

And we have _nothing_ on targets for large-battery BEV manufacturers other than Tesla and GM, and GM’s targets and stated possible manufacturing capacity for the Bolt are _less_ _than_ _Tesla’s_ _current_ _production_, let alone less than any increase from Model 3 production. If GM sticks to ~50k while Tesla ramps up for Model 3 Panasonic-Tesla will continue to be the largest automotive battery manufacturer.

So, the current largest automotive battery supplier wants to ramp production faster than everybody else, is building a BEV charging network rather than charging sites, is building it with more capacity than everybody else, with faster charging rates than everybody else and is building BEVs that are designed to be used to travel long-distance, rather than for local use.

But, no, Tesla will definitely not have any competitive advantage remaining by 2025.

Economies of scale will be from the factory that they’re building that will produce more than the world’s current production of lithium ion cells. As far as scales go, that’s a good one.

As far as their battery tech, some could be from having the exact chemical mix in the batteries be proprietary. The majority of it is at the pack level, not the cell level. Other manufacturers use prismatic cells because they’re easier to manage than several thousand cylindrical cells, but are inferior in nearly every other way.

“will produce more than the world’s current production of lithium ion cells. …”

That’s Tesla comparing to / using an old 2013 world output figure.

All Asian suppliers invest a lot until 2020 or 2025.

Compare it then to the competitor’s 2020 or 2025 output, not looking back at 2013 figures.

Hmmm, I think it was the 2014 global production for li-ion batteries, not the 2013 figure.

And last year, Panasonic was far and away the #1 maker of li-ion battery cells for BEVs. China’s BYD did edge out LG Chem for the #2 position, but not by much.

Now, that’s not to say that BYD will necessarily remain far behind Panasonic. BEV production in China is accelerating rapidly, and it’s quite possible that BYD will overtake Panasonic within a few years, the Gigafactory notwithstanding.

But “possible” is a long way from “we’re sure it’s going to happen”. EV production in China is very much dependent on China’s government policies, which have changed quite swiftly and may do so again.

It is difficult to compare that far into the future – many automakers are making promises, but there are no cars, yet.

Also, if Tesla remains successful, then they will be building GF2 and maybe GF3 by 2025.