Tesla Gigafactory Creating Worldwide Battery Cell Shortage

Tesla Gigafactory

DEC 18 2017 BY STEVEN LOVEDAY 56

It’s no secret that there could at some point be a worldwide lithium-ion battery shortage, but now reports are pointing to the Tesla Gigafactory as the root of the potential problem.

Etnews out of South Korea is placing blame specifically on the Gigafactory for the growing battery shortage epidemic, which is now a global problem. As more EVs become commonplace around the globe, this is an issue that only stands to accelerate.

Tesla is partnered with Panasonic in its Reno/Parks, Nevada Gigafactory venture, and the automaker has recently admitted that Model 3 bottlenecks can be primarily traced back to issues with battery pack assembly, though there was no mention specific to cell shortage. According to recent reports, Tesla is buying up all of Panasonic’s cylindrical battery cells, making it nearly impossible for anyone else to partake.

Tesla Model 3

Production of 2170 cells at the Tesla Gigafactory

However, it gets a bit more interesting since Panasonic is not the only maker of such cells. Samsung and LG Chem are two other widely known battery manufacturers. It seems these companies don’t have any excess either. Though this may not be the direct fault of Tesla, the shortage of Panasonic cells causes others to look elsewhere.

Not to mention the fact that these other battery makers already have multiple contracts in place with other EV manufacturers that weren’t mentioned as contributing to the cause of the shortage. Although, a Japanese battery distribution rep told etnews:

“It is impossible to purchase cylindrical batteries within Japan and we were even notified by Panasonic that they are not going to sell cylindrical batteries anymore. It has come to a point where we cannot even purchase products from Samsung and LG and even products from Samsung and LG that were produced in China.”

Needless to say, companies around the world (not just electric vehicle makers) are unable to get the necessary batteries now, or in the near future. It may be months or longer before these needed cells materialize. One can only imagine or assume, however, that if an extreme demand continues to be so impacting, current battery makers will do everything they can to step up production, create new factories, and revel in the demand. Panasonic is already proving this.

Further, as EVs begin to move into the mainstream, it would only make sense for entrepreneurs and other related industries to move into the field of battery manufacturing. This is clearly something we’re bound to see in the near future.

Source: etnews via Teslarati

Categories: Tesla

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56 Comments on "Tesla Gigafactory Creating Worldwide Battery Cell Shortage"

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Aslun
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Aslun

This is exactly what’s needed to get things happening. Very good news indeed.

eltosho
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eltosho

Absolutely!

philip d
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philip d

Exactly. Maybe those that are whining about shortages should begin investing and building their own battery factories in partnership with the major cell manufacturers like Tesla did.

I’m pretty sure Tesla did this for this very reason and not just for fun.

Pushmi-Pullyu
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Pushmi-Pullyu

Yup. There have been a lot of people posting to InsideEVs who are in denial about PEV makers needing to control their own battery supply, as BYD and Tesla do. It will be interesting to see if now they are willing to face reality on the subject.

Tesla didn’t spend billions of dollars building Gigafactory One just to lower the per-kWh price of batteries a bit faster than the market trend for falling prices. Tesla spent those billions primarily to make sure that they could control their own battery supply, rather than having Panasonic be in control and thus limiting Tesla’s production, as happened in the past.

Ron
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Ron

I’m confused. Looking at the article, it would seem despite their production at the Gigafactory, that Panasonic is out of cylindrical cells. Does the Gigafactory make cells from lithium and other metals, or does it assemble packs from cells made by Panasonic in Japan or elsewhere?

Spider-Dan
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Spider-Dan

When listing companies that control their own supply, you forgot to list Nissan (who got out of the business because it was not financially sound to stay in) and Mitsubishi (who has had shortages of Outlander PHEV batteries for 5+ years).

This reads to me like more “Batteries are going to run out Any Day Now” doomsaying. Let me know when Samsung shuts down Galaxy production because there are no batteries, or when there are no Bolts or Leafs on any dealer lots because there are no batteries to put in them.

Jonnyac13
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Jonnyac13

Welcome to free market capitalism; where those that think, develop, and incur the cost of such measures race to the finish line and capitalize on new technology. Anyone who is following what China is doing just near South Korea knows that this is not a game of everyone being on the same level, but who has the risk tolerance to push their chips in and develop it let alone the technology and engineering costs. For all the Tesla haters out there this is proof that you have to put your money where your mouth is and capacity is awarded with contracts backed by money not given. Kudos to Musk for earmarking the capacity early and being the only one willing to throw 5,000,000,000 at one factory, when nobody would partner with him outside Panasonic .

pjwood1
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pjwood1

Don’t want to be there sayin’ “Brotha can you spare some cobalt?”
https://tinyurl.com/yc2yahaj

philip d
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philip d
Oops. Looks like the big auto-manufacturers’ plan to wait until EVs became viable and buy their way to the front as market leaders didn’t pay off. I remember having this argument with many people over the years in comments sections. They would argue that Tesla is wasting huge capital by investing in their own battery factory since once demand for more cells becomes apparent in the market the major cell manufacturers would simply scale up overnight since that is what they do and will always be better at doing so than some EV startup. I argued that cell manufacturers are historically cautious and will ramp up production and invest in more infrastructure but very slowly and only in response to their own short term demand forecasts. In fact if you remember Panasonic balked originally at investing so much into the Gigafactory due to Tesla’s projected production output needed. Tesla had to put more of their own captial in to get it going and the deal done. The cell manufacturers are investing and building as we speak and are starting to really wake up but Tesla has gotten a huge head start. Maybe in 5-8 years Toyota or VW can begin… Read more »
Pushmi-Pullyu
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Pushmi-Pullyu

Good to see I’m not the only one who saw all of this and understood the future (and now current) implications.

I find it amazing that so many people here were arguing that we were wrong, even after we explained things and pointed to the facts about battery makers being reluctant to build out new production capacity. Wishful thinking on their part, I guess!

randomhuman
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randomhuman

There is no such thing as a free market. It‘s a mystery. Also the current growth in electric vehicles especially in China is subsidized, which is a good thing in my point of view because many industries get subsidized unfortunately also the oil industry. Capitalism in its form today is a highly destructive system as we can see -> climate change, great environmental damage in general. There’s nothing to be proud of.

Terawatt
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Terawatt
Capitalism in its current form is unsustainable and therefore it must be fixed. But to call it a bad system for the environment is still kinda unfair, because although it doesn’t work, it fails less spectacularly than any other system ever tried. I do agree that we cannot just go on though. We know a lot about what is wrong, but there’s very little political will to act, in no small part because a huge part of the electorate actually prefers inaction, once they discover that action means they have to make some changes in their lifestyle, and not all of them just symbolic. People love campaigns about irrelevant stuff that means they get to feel as if they’re doing something, but they don’t actually have to change anything. Tell them it is not alright to fly intercontinentally for a weekend in New York or London, and they get mad. But tell them to remember to unplug the cellphone charger when not in use – an act that will save something like a second worth of car driving over a year – and they will instead get mad at you when you tell them it is utterly pointless to do… Read more »
Recoil
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Recoil

I am sorry but you don’t know what the heck you are talking about. If capitalism is back for the environment what would you call socialism/communism. My brother works at a coal fired power plant and I joked with him I am going to take pictures and sell them to the Chinese. He said go ahead but don’t worry about the back half as that is what we use to filter the soot, ash, smoke and China doesn’t do any of that. The Chinese government does anything it wants. There are no ecological studies done for anything the government wants to build. They bulldoze anything, the damn anywhere, they dump where ever they want as they are the government and you can’t fight them.

Alaa
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Alaa

This means that Tesla will produce more than 500,000 cars a year. And that will happen very soon. Not only that but none of the other boys will even come close to this number. Not even if they started to make their own batteries, simply because by the time they do their own batteries Tesla will be making millions of cars per year.

terminaltrip421
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terminaltrip421

are you being facetious?

Robert Weekley
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Naw….Diamonds are facetious! The more facetious the Better!
/$@RK. ?

Pushmi-Pullyu
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Pushmi-Pullyu

terminaltrip421 asked:

“are you being facetious?”

No, here Alaa is being completely realistic. The only thing he’s missing is that BYD also controls their own battery supply, just like Tesla.

If you think he’s wrong, then you need to read this article again.

Clive
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Clive

Wow.

I absolutely love the way you said it because you are spot on.

Clive
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Clive

I am referring to Ataa

Clive
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Clive

Alaa

Alaa
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Alaa

Thank you.

God/Bacardi
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God/Bacardi

“Very soon” is very subjective…I’ll also give you the benefit of the doubt that you meant “vehicles” and not “cars” which would exclude the X, Semi and Y…Tesla is supposedly opening a factory in Europe and China and there’s speculation that the GF1 may produce Semi and/or the Roadster…I believe until all its factories are operational which is years away would Tesla be producing 500K year…If and when Tesla drops the small battery RWD Model 3, demand will take a nosedive…

Should also note, GM sells this in China, expect this thing to be sold in other 3rd world countries…
https://insideevs.com/gms-baojun-e100-surges-to-1700-sales-in-china-for-october/

Terawatt
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Terawatt

IDK about that. If the problem is a shortage of lithium, how do you know what Tesla has or hasn’t got in place to secure the supply?

Having a big factory isn’t really going to be of much help if you can’t get the inputs.

Even having contracts that entitle you to such inputs isn’t enough if the other party is unable to deliver on its promises.

Maybe Tesla has this covered. I remember them emphasizing the lithium resources in the vicinity of the factory when they announced the choice of site, but I don’t think they’ve actually been making any use of that so far, or even if those resources can easily be exploited. In fact, I think it’s more or less agreed upon that Tesla’s choice of site was basically down to where they got the best deal for land and taxes.

It’s great to attract more investment into battery manufacture. But I certainly hope it doesn’t take too long to fix any shortcomings. While I do appreciate that things are really moving fast – just look at five-year periods! – I also am getting kinda tired of waiting.

georgeS
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georgeS

Why is Tesla buying Panasonic cells from Japan?

Why aren’t they made in the gigafactory?

Don’t tell me it’s power pack cells because Tesla gets those from Samsung and they are NMC and AFAIK Panasonic doesn’t even make NMC cells.

Like I’ve been saying, I think Panasonic is having issues at the giga factory with cell production.

Clive
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Clive

Why do you say that❓

ffbj
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ffbj

Well, perhaps because it is well known.
Japanese executives don’t come out and kowtow to American companies regularly, for their errors.

So they had to make up the deficit of promised battery production.

Robert Weekley
Guest

Panasonic, Japan, has had contracts with Tesla, for 18650 Cylindrical Cells, since the Roadster!

Bigger and Bigger Supply contracts, basically, year over year! These are contracted for use by Tesla, and either contracted or earmarked internally, for Model S & Model X production. You might have heard that they are anticipating much more sales of this car set this year, even as they clean up the Battery Module Assembly challenges at the GF1, for the 2170 cells that are used in the Model 3.

GeorgeS
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GeorgeS

Robert,
So Model S and X are using all the cells up in Japan?

Actually you may have a good point. Does Panasonic even make a 2170 cell in Japan? If not then Model 3 cells could not be sourced from Japan.

Some Guy
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Some Guy

Panasonic makes cylindrical cells of several formats in Japan. However, they have announced in the past that they are focussing on EV customers and are cutting back shipments to consumer industry (why bother selling cells by the thousand per customer for a minimal profit in a low margin business like consumer cells when you can sell them by the millions to a single customer. That makes the workflow really simple.
Also, it’s Q4. tesla is not tthe only one with demand, many cells for consumer industry (from smartphone charger to E-bike) are required in Q4 for the “End of the year-Rush”

HVACman
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HVACman

I also agree. Model S/X demand for Japan cells are probably a factor. But it goes beyond that.

Per IEVs monthly scorecard, October world wide plug-in sales over 120,000 vehicles. Tesla is a major cell customer, as they have high-kWh vehicles, but the global market for all manufacturers is exploding. A quick calc suggests the demand could be 2-3 GWH of cells per month demand now.

John M
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John M

Japan -> 18650 -> Model S & X
Gigafactory -> 2170 -> Model 3

ItsNotAboutTheMoney
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ItsNotAboutTheMoney

The Model S and X cells are Japanese 18650s.

The Gigafactory makes 2170s.

Pushmi-Pullyu
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Pushmi-Pullyu

georgeS asked:

“Why is Tesla buying Panasonic cells from Japan?

“Why aren’t they made in the gigafactory?”

The obvious answer — not necessarily the correct one, but the obvious one — is that it’s due to the bottleneck with Tesla assembling 2170 cells from Gigafactory One into packs. That is, the problem isn’t the supply of 2170 cells, the problem is that Tesla has not been able to ramp up battery pack assembly at Gigafactory One. That problem has by now been well publicized.

Note that at one time Tesla said they would be switching the Models S and X over to 2170 cells as soon as Model 3 production was ramping up nicely, but more recently they said they would delay that switch over. That is understandable, since the Model 3 is production constrained by lack of battery packs!

In the meantime, until 2170 cell battery pack production is humming along nicely, Tesla is still using the older 18650 cells from Japan in the MS and MX.

mx
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mx

True. I’d say Utility Scale Battery storage is taking off, as it’s now cheaper, faster to install, with faster switching times than natural gas Peaker plants, and it meets EPA regulations with no pollution.

Did you notice GE and Sieman’s have laid people off in the natural gas turbine division? Future orders must have dried up.

But, both companies are in Wind power, they should be transitioning those employees into the wind division and looking for big contracts.

HVACman
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HVACman

I don’t think that the battery storage market is what is killing gas turbine sales. The storage GWh capacity of all installed or planned battery stations is still a tiny fraction of what just a few peaker turbines can generate.

I think any layoffs are due to the impact new solar and wind generating capacity is having on ALL new fossil-fuel power plant planning and construction. Note that gas turbines are also at the heart of combined-cycle-gas-turbine power plants, which is now about the only type of fossil-fuel power plant being built these days.

pjwood1
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pjwood1

I think, yes, wind and solar, but also EIA electricity metrics showing U.S. may end 2017 contracting. That’s “efficiencies”. I don’t think there has ever been such a spread between GDP growth, and KWh sales.

South Carolina and Georgia could have used more “kowtow”, from Toshiba, this year. With 9+ billion sunk, I think we can say that.

Doggydogworld
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Doggydogworld

US electricity generation has not grown since 2005. A dozen years of stagnation tends to cause layoffs.

NG layoffs specifically are due to the end of a big NG growth cycle from 2009-15. The growth cycle was driven by cheap gas from fracking and the Obama admin’s push to close coal plants. The trend has stalled with both coal and NG settling at ~30% market share vs. the 50/20 split we once had.

Renewables are taking ~1% of share per year. It adds up over time but isn’t really a factor driving these layoffs. Batteries are tiny and have no effect today.

Pushmi-Pullyu
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Pushmi-Pullyu

“I don’t think that the battery storage market is what is killing gas turbine sales. The storage GWh capacity of all installed or planned battery stations is still a tiny fraction of what just a few peaker turbines can generate.”

I think you’re right. I think there is little reason to believe the battery stationary energy storage market is that big, or growing that rapidly. At least not yet!

Nix
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Nix

So they are trying to blame the company who actually built their own Gigafactory to secure their battery supply, for being the cause of a battery shortage?

That’s crazy. If Tesla hadn’t built the Gigafactory, the battery shortages would be much, much worse.

Doggydogworld
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Doggydogworld

Agreed. The article made no sense when it first came out last month and it still makes no sense.

Pushmi-Pullyu
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Pushmi-Pullyu

Yes, the complete lack of reason or logic in trying to blame Tesla for the looming shortage is stunning. If people really are blaming Tesla for a battery shortage, then it’s just projection; trying to shift the blame for their own failure to plan ahead onto one of the two companies (the other being BYD) which did plan ahead for the inevitable and entirely predictable EV battery cell shortage!

Homo sapiens means “wise man”. Sometimes I wonder if that should be taken ironically. 😉

God/Bacardi
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God/Bacardi

It’s been only recently as in the past several months that automakers are accepting an electrified world…GM, Volvo, BMW, VW and now Toyota (and I’ve probably missed a couple) have just recently announced their electrified futures…Thank you China for the mandate…

Rebel44
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Rebel44

Model 3 uses 2170 cells and this format is AFAIK only made (at large scale) at Gigafactory – so other battery factories wouldnt be able to supply 2170s even if Tesla needed them from external sources.

So Model 3 production shouldnt affect battery supply outside of Gigafactory (not counting sufficient supply of raw materials)

Pushmi-Pullyu
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Pushmi-Pullyu

Yes, it appears that reasoning and logic are in even shorter supply than li-ion batteries, when it comes to trying to shift the blame to Tesla!

I’ve been making the analogy of a game of musical chairs, regarding EV battery supply, for some time now. It seems that the EV makers other than BYD and Tesla are finally waking up to the fact that there aren’t enough chairs to go around!

theflew
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theflew

This story is misleading at best. Given Tesla is about the only manufacture to use cylindrical cells I don’t think this really affects other car manufactures. Even most newer ultra book laptops, tablets, and Smartphones use pouch cells. If nothing else there is just a declining need for cylindrical cells outside of Tesla’s need and that’s causing demand issues for the people that need them.

Gerhard Hauer
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Gerhard Hauer

Translation: A lot of people were sleeping at the wheel.

John
Guest
John

So Tesla makes the initial leap of faith and all the followers now want a piece of the action… and can’t because Tesla did too well by being first to market.

Boo and Hoo.

Mister G
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Mister G

GO TESLA GO DESTROY DIRTY GAS GUZZLERS AND DIESELS LOL CONNECT THE DOTS ON CLEAN AIR WAKE UP FOLKS and the tesla haters can go buy some bitcoin LOL

Futurum
Guest
Futurum

Wow, this is bad news for Tesla in particular. Big companies with cash loads (Toyota, MB etc) will easily buy deals with Panasonic etc and small companies with economical issues like Tesla will be left alone.

Pushmi-Pullyu
Guest
Pushmi-Pullyu

Your reasoning (or rather, lack of it) is just as bad as that of those blaming Tesla for the coming, entirely predictable, battery shortage.

Tesla is now in control of its own battery supply, and need not be concerned about the looming shortage facing those other auto makers, who failed to plan ahead and will be left holding the bag.

Windbourne
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Windbourne

Yes, but Tesla does have 1 major concern which you alluded to earlier (actually later).
That is control of the elements. China is running around trying to buy up ALL the mines around the world.
We were dumb enough to allow a company majorly owned by Chinese gov to buy California pass. Likewise, China is working hard to buy up Cobalt and other mines.
One smart thing would be for us to require desalination of water for those living within 100, if not 200, miles of the coasts. Then use some of that VERY concentrated brine for seperating elements, esp. Li.

ModernMarvelFan
Guest
ModernMarvelFan

So, build more battery factory.

That is exactly what Elon said he would do… To stimulate the world wide EV growth through leadership.

Now, if the demand exceeds supply, then there is incentives for supply to catch up.

Pushmi-Pullyu
Guest
Pushmi-Pullyu
“It’s no secret that there could at some point be a worldwide lithium-ion battery shortage, but now reports are pointing to the Tesla Gigafactory as the root of the potential problem.” I was expecting to read some claim(s) in this article that Tesla was creating a shortage of something that li-ion battery manufacturers need to make batteries, by cornering the market on that element or material. But no! In fact, there is absolutely nothing in this article to justify any claim that Tesla’s Gigafactory One is “creating” any battery shortage. As far as the market for li-ion batteries tightening, wasn’t that both inevitable and entirely predictable? The signs have been pretty clear that EV makers are gearing up to put new PEVs into production considerably faster, over the next few years, than battery makers are building out new production capacity. I’ve been talking for years now about how only BYD and Tesla have ensured that they will be able to ramp up production of PEVs rapidly, without encountering any shortage in battery supplies, by building battery factories whose output they control. Perhaps now those who kept arguing with me, saying that any auto maker could buy as many as he… Read more »
Windbourne
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Windbourne

What is interesting about this, is that so many stories have pointed the finger at Tesla and yet, had they used just a BIT of common sense, they would know that it is not the case.

My guess is that there is a full court press by the kock bros and probably joined at the hips with oil/ none chinese automaker industry.

mzs.112000
Guest
mzs.112000
Not enough cylindrical cells? Well then why not use a prismatic cell? Sure the cell-level energy density is lower, but LiFePO4 does have other advantages. 1.) It is safe, you could shoot it, crash a car into it, burn it, or grind it up and and sprinkle it on your salad. Though I still do not recommend doing any of those things. 2.) It does not degrade as fast. At 80% depth of discharge, it will take 2500 cycles for it to reach 80% capacity. 4.) It does not require an active cooling system to work well. Though an active cooling system will still help it perform better in hot climates. 5.) They can be fast charged from 0% to 85% in 15 minutes. 6.) They do not use Cobalt, which is expensive and dirty to mine. Also has humanitarian issues as well if sourced from the Congo. 7.) Does not require use of a complex battery management system. Though a BMS does help increase longevity in some cases and is still needed if you want fast charging. 8.) Has very long calendar life as well if stored between 20% and 80% state of charge. It can probably sit for… Read more »
Rad
Guest
Rad

The Gigafactory is making lithium batteries. If anything, it is helping to alleviate a battery shortage. Now, if we are talking lithium, which the Gigafactory is using, that is a different story.