Tesla’s Director Of Battery Technology: “We Need To Take Risks”

APR 29 2015 BY ERIC LOVEDAY 36

Tesla Shows Off The Model S Glider And 8,000 Odd Panasonic 18650 Cells That Power The Car

Tesla Shows Off The Model S Glider And 8,000 Odd Panasonic 18650 Cells That Power The Car

Tesla’s Kurt Kelty, the automaker’s director of battery technology, seems a bit upset with how Panasonic operates in Japan.

According to Kelty, automakers need to take risks, especially when it comes to new, advancing technologies such as batteries:

“We need to take risks, otherwise there will be no prosperity in business.”

Kelty made that statement during an event in Osaka, Japan. However, it was this follow-up statement that perhaps shows his disapproval over the way Panasonic operates:

“We take risks, but it seems not the case in Japan.”

Kelty appears to lay some blame for delays on these same Japanese suppliers too, saying that a weakness among many of Tesla’s suppliers is moving too slowly:

“Decision-making often takes time. For example, when the product is almost ready, they may want to do the test again.”

Finally, Kelty commented on a supply issue, without identifying the suppliers.  According to Kelty, Tesla asked a Japanese supplier to increase its production.  The supplier declined, saying that Tesla should slow its expansion plans:

“We’re a growing company, and therefore we need to put pressure on the suppliers, so the suppliers need to grow as well.”

Stated Kelty.

Overall, it would seem Kelty isn’t pleased with much of what goes on in Japan that relates to Tesla.

Source: Automotive News

Categories: Battery Tech, Tesla

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36 Comments on "Tesla’s Director Of Battery Technology: “We Need To Take Risks”"

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“According to Kelty, Tesla asked a Japanese supplier to increase its production. The supplier declined, saying that Tesla should slow its expansion plans.”
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They are probably in cahoots with Toyota, LOL.

Don’t laugh, this is Japan.

Sounds like Japan can use their own Sherman Anti-Trust Act.

(Ha ha, I originally wrote that as “Toyota” instead of “Japan!” Sign of who owns who perhaps?)

The Japanese have been using such tactics very effectively for decades. Read this:

http://www.uwsa.com/issues/trade/japanyes.html

If they are stalling Tesla, the reason has nothing to do with “taking risks”. They think nationally, and it’s their way to defeat the industries of a competing country.

I stand corrected. The UN and the World Court need something akin to the Sherman Anti-Trust act. And they should probably start with breaking up the Japanese cartels (many of which likely have connections with the triads and operate outside the law).

Not ‘cahoots’, it is ‘keiretsu’.

I am not sure any auto supplier is on the same growth plan as Tesla.

I wonder if this means there is a new cell scheduled for Model X and that has been the holdup all along. They didn’t want to call out Panasonic, or reveal that a new batteries were coming “bastardizing” (just gonna poke the bear) the current Model S.

No, Model X production isn’t waiting for Gigafactory battery cells. It’s going into production before the Gigafactory starts any production at all. Now, that’s not to say that Tesla hasn’t intentionally delayed the Model X. I don’t have any inside info here, but I find plausible the suggestion that Tesla has delayed the debut of the Model X by choice, because (a) they can make a higher per-unit profit off the Model S, and (b) their battery supply continues to be a constraint on production. Now, that said, I think I recall seeing a quote from a Tesla spokesman saying that the Gigafactory will start supplying batteries for the Models S and X even before they start selling the Model ≡. But it’s simply impossible for the Gigafactory to supply any cells as soon as this fall, when the Model X will finally go into production. They’re still working at putting up the walls on the first section of the Gigafactory. Now, is there any scenario where I could be wrong? Sure. It’s not impossible that Panasonic is switching one or more of its battery factories over to making the new size of battery cell. But all the publicly available… Read more »

I don’t think he’s saying they need to take risks in the sense of chemistry. He’s saying he needs his suppliers to take risks in expansion (cathode/anode/etc). If Tesla is looking to increase production 10x, they need their suppliers to do the same.
The suppliers aren’t willing to risk their businesses on Tesla’s promise that they can sell all those cars/batteries.

I’m guessing this problem will go away w/the Gigafactory.

No. The gigafactory is the cause of this. The gigafactory uses anode, cathode, etc materials, it does not manufacture them. No materials no batteries.

No, the Gigafactory will manufacture those components… on machinery owned and operated by Panasonic.

Panasonic being slow means the Gigafactory will be as well.

Yes, I thought Tesla was going to make the whole battery from raw materials at the Gigafactory, to stop supply chain problems.

Right. Panasonic will be running the cell-making side of the Gigafactory; Tesla will run the side which assembles cells into packs.

But Tesla has also said they plan to have third-party suppliers set up manufacturing right inside the Gigafactory, to supply the battery cell parts which Panasonic does not manufacture itself. It looks to me like Tesla is trying as far as possible to go from raw materials to finished product… rather than going from processed materials to finished product, which is the industry norm for battery cell makers.

Other Gigafactory suppliers will be enticed to build factories nearby, for local sourcing.

GM has had success with getting vendors to set up manufacturing inside GM’s auto assembly plants, so I see no reason this can’t work for Tesla’s Gigafactory.

The aim is to be able to make the battery cells and packs from raw materials but also make packs from cells made elsewhere. The cells are pretty basic but hard to say how raw all of the materials going into their production will be coming into the gigafactory. Certainly the plan is to make the anodes and cathodes on site and use as many basic component materials as possible (from mining and recycling) but likely some will come in processed to some degree. For entire packs, I’m sure there will be plenty of electronic components that come from outside production. Tesla’s dilemma with getting suppliers to move faster could have nothing to do with Panasonic.

It will be Panasonic and suppliers in the GigaFactory. Maybe there are some companies in Japan not ready to pony up for tooling in a US factory.

Mmmmmmm maybe get a new supplier? Tesla should find a new number one draft pick as a supplier since the other one feels safe in their job.

Tesla has made public statements inviting other companies to join in their Gigafactory partnership. If any company other than Panasonic has agreed to do so, it’s being kept secret.

Looks to me like everybody thinks this is a huge gamble on Tesla’s part, a gamble they don’t want to be part of. Even Panasonic has been noticeably unwilling to invest as much money as Tesla wants them to, or at least they’re unwilling to invest it as -fast- as Tesla wants. (I’ve detailed Panasonic’s entirely valid reasons for that in another post in this discussion.)

I very much hope Tesla succeeds, and succeeds brilliantly, with its Gigafactory gamble. But it -is- a gamble.

The gamble is much reduced by expanding the market for batteries by targeting stationary storage solutions for renewable energy sources, grid-scale storage, micro-grid storage and even schemes to reduce demand charges at Superchargers and L3 chargers.

It seems Tesla’s management skills in dealing with Asia is still very much a work in progress. Trying to rush Japanese gentlemen, not sure it is the most efficient attitude. It might end up like with Toyota, with Panasonic deciding that after all they would rather produce fuel cells so they never have to deal with Tesla ever again.

It’s well known that Japanese corporate culture is notoriously conservative and risk-averse. The best book I’ve ever read on the subject is You Gotta Have Wa by Robert Whiting, which on the surface is about how baseball is played in Japan, but reflects a much more deep-seated adherence to staying in the mainstream and avoiding standing out.

It didn’t surprise me in the slightest that Panasonic played coy when Tesla was trying to get their buy-in on the Gfactory. That the combination of Tesla’s millenial Silicon Valley tech vibe with Panasonics careful, planned analysis might cause some friction is to be expected.

BTW, Japanese corporate conservatism makes Toyota all the more notable. By Japanese standards, they’re really going out on a limb and are going to be very exposed, should hydrogen not pan out. My guess is it Bill Reinert’s lasting influence.

You really think Toyota is going out on a limb? I think the opposite. Mirai production numbers are a joke, and in Japan hydrogen has full official backing. Toyota is doing a minimum effort to please official policy, a policy that will continue for years impervious to data. I don’t see the risk at all.

Perhaps to the Japanese, hydrogen fuel cell vehicles represent less risk than battery electric cars. The Japanese might see fuel cells as…
* 300 mile range now
* fast refueling now
* more engineering needed to reduce fuel cell stack costs
* more engineering needed to make on board storage of hydrogen safer
* solutions exist to generate hydrogen
* money needed to build hydrogen distribution infrastructure

Whereas Americans see it as…
* BEVs require less and cheaper infrastructure
* BEVs have lower operating cost per mile
* Innovation needed to developed better batteries, which is a solvable problem

Interesting. The Japanese feel safer fixing up a lousy technology (fuel cells) than investing in innovation to develop a better solution (BEV).

I think it’s simpler than that. The government of Japan is pushing hydrogen fuel tech, and pushing it pretty hard, which probably means significant government subsidies. A comment on another current article here at InsideEVs says that other countries are also offering substantial subsidies and/or carbon credits for “fool cell” vehicles.

I think Toyota has taken the short-term strategy of building fuel cell vehicles, so it can eat as much from the public money trough as it can. But despite Toyota’s propaganda promoting “fool cell” vehicles and denigrating plug-in EVs, I think they know where the future lies. I think they know it doesn’t lie with FCVs.

Watch and see just how -many- Mirais and other FCVs Toyota builds. I’m guessing they won’t build them in more than compliance car numbers, despite how hard the Japanese government is pushing them.

Obviously it’s a huge risk to Panasonic to go all-in with increasing production just for Tesla’s sake. What if Tesla suddenly folded? Maybe some currently unknown production problem with the car made people suddenly not want the car anymore, then Panasonic would be left with a huge oversupply with no customers for it.

Funny that Panasonic Took the Deal with the little, tiny company that wanted to make a Sports Car (Roadster) using their Batteries, and they have watched them increase production, Factory investments in the Plant, and can’t relate to that all connects with the need for more batteries to match the growing order demands, and production schedules!

Also – While the Usual ‘Risk’ might be a growth plan of 10% – it sounds like they don’t even want to split that in half – and go for a Growth level (Increased Equipment installed, making more of the Tesla Demanded Cells) by 5%!

Then again – Tesla was recently Reported as connecting with Samsung – a Panasonic Competitor: Could that have been for cells for the car – or for the Home energy Storage units?

Well. what exactly do they plan to make money on? TV sets? Batteries are saving them; the other risk is that they get left out as a supplier.

Samsung is almost certainly a better risk tolerance fit for Tesla, and moves much, much faster. They have been able to keep up with Apple, even pressure it at times. It is the only other phone seller that actually makes a profit. Whether they have the battery chops is another matter. I don’t know.

The bleeding edge is a lonely place.

What is he referring to precisely? It’s not clear. I wish he could clarify.

Ramping up production now for a guessed future demand. All the big producers, even Samsung and LG Chem, like to do long term contracts (about 2 years) and increase their production to exactly meet these contracts volume. It’s a safe thing for them, but that way you can’t ramp up production in the short term, if demand should exceed the prediction of the car makers. Imho that is exactly what will happen with +150mile, sub 35k$ BEVs in the end of 2016 (= high demand but battery supply constrained production til 2018).

Seems the comnents here are mostly focused on batteries … while Tesla is in the process of moving the Model X from Alpha, Beta, to full production in the next six month, There’re many more parts & supplier’s than 18650 cells. Remember Elon Musk stating 6 months after Model S started initial production (in Dec) they had several hundred vehicles parked, waiting for a couple parts. Tesla had made the costly decision to air freight wheels & other parts to meet first year end delivery numbers. Elon’s comment was supplier just weren’t believing the time & quantity schedules that Tesla had provided. Think the risk is greater for these slow to respond suppliers. Recently Tesla’s top executives visited a number of automotive suppliers & officials in China. With global supply lines, there are multiple options to find good partners. Japan auto and parts production has slowed greatly in the last couple years due to a period of high yen. (Reason Honda, Nissan & Toyota expanded production capacity in N.America). This has left significant production capacity idle in Japan. Seems odd for the suppliers to be rejectinng order for new parts. BTW: Tesla’s main production plant in California was aquired because… Read more »

The guy quoted here is the Directory of Battery Technology, so I think we are all just guessing he was referring to some sort of battery supply.

Tesla’s Director Of Battery Technology said: “We take risks, but it seems not the case in Japan.” Let me jump to a conclusion here — but I don’t think I’m jumping very far — and guess Tesla’s Director of Battery Tech was talking about Tesla’s battery cell supplier, which is Panasonic… by far Tesla’s most important supplier in Japan. This statement appears to be just the latest in a long string of surprisingly public statements by Tesla spokesmen, statements which appear to have the purpose of applying public pressure on Panasonic to, in the past, supply more batteries; and currently, to agree to investing a lot more money in Tesla’s Gigafactory project. Now, when Elon Musk says things like this, I just put that down to Elon’s unfortunate habit of blurting out things before actually thinking about how his comments may come across to others. But when another Tesla spokesman says something similar, it appears to be a corporate strategy. Does Tesla honestly think that they can strong-arm Panasonic in this way? It seems counter-productive to me. * * * * * Altho I very much want to see Tesla continue to expand rapidly, and I very much want its… Read more »

Twenty years ago I spent many months doing “Kabuki” with Panasonic over EV technology that they could have licensed from us but they preferred to take the safer road of using their own primitive product. That tech. is now incorporated into products sold to Tesla and many others, but no automotive customer in Japan buys it. There have been many failures in the EV market over past years which left some suppliers holding the bag. Makes it tougher for automotive suppliers to believe in Elon’s projections. I can imagine Panasonic management is also turned off by his style and this contributes to the problem. Very interesting to watch this clash of cultures but I fear Tesla is going to continue to get stonewalled to some extent by Panasonic.

I think the growth-moderating effect that Panasonic has on Tesla is not all bad. I think Tesla’s book-to-bill ratio is much more stable this way. Can you imagine how many more growth problems Tesla would have had with other suppliers if they were not constrained by Panasonic?