Tesla Motors Discussing Battery Supply Deal With Samsung SDI

FEB 11 2015 BY MARK KANE 27

Samsung Battery Cells

Samsung Battery Cells

According to a recent article in Korea Times, Samsung SDI is in talks with Tesla Motors over lithium-ion batteries for electric cars.

If the parties agree, Samsung SDI could supply 8% of batteries that Tesla needs this year and 40% next year.

Panasonic wouldn’t be happy then, right?

“With Tesla seeking to diversify its battery sourcing channels beyond its key partner Panasonic, Samsung SDI will have greater room to supply more electric vehicle (EV) batteries to Tesla,” said an official who declined to be named.

Samsung SDI is expected to account for about 8 percent of Tesla battery demand this year, worth 36 billion won. It expects to raise that portion to 40 percent in 2016, with sales to the American company rising to 254 billion won.

“From next year to 2018, Samsung SDI may handle 40 percent of Tesla demand,” said another source directly involved with the issue.

Samsung SDI said nothing has been decided.”

It’s noted that in 2014, Samsung SDI supplied roughly 7.2% of all batteries used in EVs sold globally, mainly as supplier to BMW i3 and i8.

Source: koreatimes.co.kr

Categories: Battery Tech, Tesla

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27 Comments on "Tesla Motors Discussing Battery Supply Deal With Samsung SDI"

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No, I don’t think Panasonic would be upset, assuming the reason they’re doing this is volume, not quality/diversification. If Panasonic doesn’t want to scale up because they see tremendous risk, it makes sense for both Panasonic as well as Tesla for Tesla to seek another vendor to share the risk with. If suddenly, no one wants to buy an EV, does Panasonic want to take 100% of the hit, or should Panasonic and Samsung both absorb the part of the losses?

If all of a sudden nobody wants to buy EVs the only thing they will lose out on is all the R&D money they have poured into batteries (even with that they use them for phones and everything else electric anyways). Mostly it seems battery supply is hardly keeping up with the production of cars atm.

electric-car-insider.com

“Demand” for EVs is currently being set by ZEV requirements rather than consumer demand, with the exception of Tesla, BMW and Nissan. How is this verifiable? Who is creating demand? How are they creating demand? (i.e. ad budget).

When was the last time you saw a manufacturer create a new product and not advertise it? (Tesla is a bit of an exception. Tesla uses “earned advertising” it’s a myth that they don’t market. They market plenty. They just don’t use paid ads. If you’re good looking enough, you never have to pick up the dinner tab).

The prices for EVs are elastic. Manufacturers simply drop the price until they move. They are not advertising to make demand match production. They are using pricing to move a limited amount of production.

Nice theory.
Totally doesn’t seem to match reality.
As Tesla is supply and assembly line constrained.

Nissan doesn’t advertise the Leaf much either, nor Toyota the Prius.

I wonder if there will be any way for the customer to know if the car they are buying has Samsung or Panasonic batteries. At this stage I guess there is not enough data to say which is best long-term.

Wasn’t Tesla “in talks” with Samsung for supplemental battery supply a year or two ago? Nothing came of that then, I wonder if it will be different this time.

I also wonder if Tesla “leaking” that it’s in talks with Samsung is just a way to push Panasonic into making a bigger commitment to supplying Tesla. There was speculation over that possibility the last time.

Obviously Panasonic is reluctant to invest as much in building the Gigafactory as Tesla wants them to. Could this be just a ploy on Tesla’s part? Contrariwise, if Panasonic keeps dragging its feet on commiting to building the Gigafactory, will Samsung be invited to be another partner?

This is expected as Tesla is in desperate need of MORE BATTERIES as the capacity and ramp up of Gigafactory is nowhere near adequate. Also this ensures that Tesla can keep going with their aggressive growth track. 70 % growth in sales is projected for 2015 and perhaps another 70 % for 2016. So if Samsung supplies 40 % batteries in 2016, then it means in practice that Panasonic is roughly doubling their battery production capacity!

This deal also would make it possible that Model 3 comes on schedule. Perhaps this is the black swan event that those who predicted that Model 3 will be late, did not take into account. They did not consider that Panasonic does not have monopoly over Tesla proprietary battery formula, but Tesla can request Tesla-cells to be produced by other suppliers.

I don’t think the reason InsideEVs has predicted that the Model ≡ won’t debut until 2019 — two years late — has much to do with limited battery supply. It has to do with Tesla’s history of -always- being more than just a bit late with every model, with Tesla still being a new company without a lot of experience developing new models of mass-produced cars, and with the Model ≡ being something that Tesla absolutely -has- to get right coming out of the starting gate, coupled with Musk’s notorious perfectionism.

Of course, I hope that the Model ≡ will come out sooner, but I think the “smart money” would agree with InsideEVs’ assessment. I will be very surprised indeed if Tesla starts selling the Model ≡ in 2017, but I admit to a bit of hope for 2018.

If Panasonic is supplying 40% of the Batteries in 2016 and Tesla increases production by 170% in 2016 (compared to now). This means Panasonic supplies 40% of those 170%. Which would mean overall share for batteries will be (now –> 2016):

Samsung: 100% –> 102%
Panasonic: 0% –> 68%

So Samsung will stay the same. Panasonic is added. What do you think?

sorry switched the companies… Obviously its (now –> 2016):

Panasonic: 100% —> 102%
Samsung: 0% —> 68%

I don’t believe this for a minute. Exclusive Tesla fans have explained repeatedly that there is zero additional battery supply available worldwide, right?

There’s still no way GM could build the Bolt. The Michigan LG Chem factory was intentionally designed to be non-expandable and let’s not forget there’s only so much lithium.

So yeah, I’ll believe it when I see it. 🙂

No, Tesla fans are just complaining that Panasonic does not have sufficient prodution capacity and their willingness to increase production capacity is slower than Tesla’s motivation to increase their car production capacity. This is the conflict that Elon has lamented now for years. Tesla does not want to be depended on subcontractors.

Lithium production capacity is suffient and easily scalable. The there is scarcity over lithium then the price of lithium goes up and lithium supply is rapidly increased. Lithium makes up less than 5 % of the cost of EV battery, so the price of lithium has negligible effect on the costs of EV batteries.

E.g. in Finland there are untapped lithium supplies that could be adequate to satisfy projected global EV demand many times over.

Breezy said: “I don’t believe this for a minute. Exclusive Tesla fans have explained repeatedly that there is zero additional battery supply available worldwide, right?” No other EV maker is using batteries with as high an energy density (or “specific energy”) as the battery cells Tesla uses in the Model S. It’s not like Tesla can just use off-the-shelf cells in its cars. Panasonic makes those 18650 cells to Tesla’s exact specifications, using chemistry that is, or at least was, exclusive to Panasonic. If Samsung is to make cells to supply the Model S and X, then the question is how will they match the characteristics of the Panasonic cells? Can they reverse engineer the chemistry and construction to match what Panasonic makes closely enough that it won’t cause problems? Mass-produced EVs are designed around the battery pack; the voltage, power output, and charging characteristics are all highly dependent on the exact properties of the battery cells. And then there’s the question of price. Part of the reason Panasonic has been able to bring prices down on what it supplies to Tesla is that Panasonic had mothballed battery factories, which it re-opened to ramp up production to supply Tesla. Does… Read more »

If the rumours are true and the target for the Bolt is 25k-30k units per year starting 18 months from now, can GM source enough cells to produce them, as well as the Volt and the Spark? The simple answer to the question is yes. It may not be as spectacular as one large factory in the desert, but it doesn’t need to be.

You seem to neglect that Tesla’s big battery approach is not the only way. Those same kWh distributed among many more, less costly, lower range vehicles could be effective if put on the road today; but Tesla chooses not to follow that path. That’s fine, it’s Tesla’s business. But let’s not dismiss the efforts of Nissan and GM which frankly have had considerably more direct impact on reducing emissions. Their products may not be compelling to you, but they have been compelling enough to sell 250,000 units.

I appreciate what Tesla is doing, but they are not the only player, and have made a relatively small contribution to date having sold about 8% of the world’s EVs since 2010. I believe they will continue to grow, as will the electrification efforts of others.

In the time it has take GM and Nissan to sell 250k EVs and EREVs GM has sold 40M ICEv and Nissan 20M ICEv.

They have artificially restricted EV and EREV sales to the green car ghetto by selling under performing cars relative to the ICEv competitors in the same price range.

They have restricted electrified vehicles to the Green Car Ghetto. They are not serious. Tesla has both feet in the game. Nissan one and GM half a foot. Now with the Bolt they have one foot in.

None match the seriousness of Tesla.

Well Apple is not going to buy Tesla now!

(OK, that was never going to happen except in the crazy theories of some people.)

Samsung is a key Apple supplier. The companies have something like a bad marriage. They fight but they are still in bed together. Apple has been trying to reduce purchases from Samsung but it’s not so simple. Other suppliers have failed to match Samsung’s capabilities.

Why is Mitisubshi not going to Samsung for a battery supply agreement to increase the Outlander PHEV production? There has been multiple US launch delays due to battery shortages. If this is true Mitisubshi has some serious issues with there leadership and driving accountability within their supply chain.

Why did Nissan build three battery factories, instead of just buying batteries from some third party? Because that was the only way to guarantee a reliable supply of exactly the kind of batteries they wanted for their Leaf.

And Tesla is building its Gigafactory for exactly the same reason.

Plug-in EVs need a high volume of comparatively cheap batteries. If the battery maker has a shortfall in production, who are they gonna short? The camera maker or the cellphone maker, with its small high-priced battery, where the battery maker makes a high profit margin with each battery cell? Or the EV maker, where the battery maker makes a small profit, and only by providing a -lot- of cells?

If you think about it, it’s no surprise that GM and Nissan and Tesla have built or are building their own battery factories.

I believe Mistubishi (along with Pioneer) sued Samsung in the early 90s for patent infringement on cathode ray rear projection technologies both Japanese companies worked together with. Samsung is known worldwide for stealing technologies instead of paying royalties for them.

Even if they didn’t sue, Samsung has such a reputation in the Japanese(and now american) business world that Mitsubishi is probably smartly steering clear of them.

Vanity Fair did a write up on them a few months ago. Quoting one source “They are the most corrupt corporation on the planet”

Yes the Japanese had rightfully stolen that technology from Zenith and RCA. The nerve of that Korean company stealing it from them.

Breezy said: “If the rumours are true and the target for the Bolt is 25k-30k units per year starting 18 months from now, can GM source enough cells to produce them, as well as the Volt and the Spark? The simple answer to the question is yes. It may not be as spectacular as one large factory in the desert, but it doesn’t need to be.” 30,000 cars per year isn’t an impressive number. And of course, producing that few nominally “200 mile” EVs won’t require anywhere near the production of Tesla’s Gigafactory. Tesla is targeting 500,000 cars by 2020. Breezy continued: “You seem to neglect that Tesla’s big battery approach is not the only way. Those same kWh distributed among many more, less costly, lower range vehicles could be effective if put on the road today; but Tesla chooses not to follow that path.” That depends on how you define “effective”. One reason the Tesla Model S can be charged so much more rapidly than other plug-in EVs is because of the much larger battery pack. Breezy again: “But let’s not dismiss the efforts of Nissan and GM which frankly have had considerably more direct impact on reducing emissions.… Read more »

Tesla needs to build Tw ,,terrawatt,, factory because this Gw ,,gigawatt,, is obsolete already. Unfortunately tesla do not have the cash.

36GWon @ 8% of 55000 cars with ~75kWh, makes $100/kWh 😉

Once gigafactory is in full production Tesla will not need Samsung.

I think Tesla is like the Cookie Monster of battery production world in that they can eat and eat but never feel full. They will always demand more and more batteries. I won’t rule it out that the Tesla Model S and X could eat up all of the Giga Factory’s production.

55.000 Teslas 2015 and the gigafactory is not finished.
Panasonic has it’s part clear in the Gigafactory and meanwhile some one else needs to produce the extra demand. Like Samsung.
Batteries price and volume are holding back EV sales.
Tesla has shown the world that charging infrastructure is easy to solve.
When this is solved mass-market will go for EVs.
EVs will rule 2020.