TESLIVE: CEO Musk Says Tesla’s Biggest Challenges Are “Avoiding Big-Company-Itis” and Getting Panasonic to Up Cell Production

JUL 15 2013 BY ERIC LOVEDAY 13

It’s Like Macworld for Tesla.teslive 3

But it’s called TESLIVE.

Tesla Motors Club, along with Tesla Motors, teamed up to bring us an event known as TESLIVE.

TESLIVE kicked off on Friday July 12 at the Crowne Plaza San Jose-Silicon Valley with exhibits, a meet-and-greet,  a reception, some conference-like sessions, a Tesla Motors-sponsored party/tour at its factory and an appearance by Tesla CEO Elon Musk.

The three-day event ended on Sunday.

Here's a Condensed Version of the Agenda

Here’s a Condensed Version of the TESLIVE Agenda

More than 300 people came from around the world (including from places as far away as Japan and Hong Kong) to partake in the inaugural TESLIVE event.

For some, the chance to see Tesla CEO Elon Musk in person was the real draw.  Musk, as usual, did not disappoint.

Musk uncorked a bottle of wine (presented to him by a Tesla fan) to get the festivities underway.

Later, at a lunch-table discussion, Musk spoke a bit about the business of Tesla.

The CEO highlighted two challenegs that the automaker is faced with right now:

What's "Big-company-itis"...hmm...that's a head-scratcher

What’s “Big-company-itis”…hmm…that’s a head-scratcher

  • “Avoiding big-company-itis
  • Getting Panasonic to ramp up cell production

Big-company-itis is when a small company forgets its roots, let’s consumer satisfaction slide, overreaches its abilities and, in general, becomes one more of those greedy companies that simply don’t give a sh@# about anything not related to the bottom line.

Tesla should have no problem avoiding this, at least for some years to come.

So, the bigger current challenge is this cell ramp up, to which Musk says this:

“We’re working with Panasonic to ramp up production. We need a lot of battery.  The sheer number of battery plants that needs to get built is quite staggering.”

This could be a “real” problem.  If Musk is being serious here, then this could play out to be quite an issue as Tesla looks to increase production and eventually add the Model X and that third-generation cheaper Tesla into the mix.  Then there’s that electric truck, too.

Let’s hope that the cell production ramp up goes smoothly or it could be something that really clogs up Tesla’s future targets.

Source: Mercury News

Categories: Tesla

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13 Comments on "TESLIVE: CEO Musk Says Tesla’s Biggest Challenges Are “Avoiding Big-Company-Itis” and Getting Panasonic to Up Cell Production"

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It sounds like Panasonic should build a battery production factory in the same town as Tesla to make sure they have access to a fast suppy of batteries not to mention all the new jobs it would make if they opened a battery factory across the street from the Tesla factory. Or they could build the battery factory on the same vast grounds as the Tesla factory or in the Tesla factory itself.

How much is Tesla in bed with Panasonic? Maybe it’s time to shop around. That would at least put pressure on them.

The all new 2014 Model S!

Now with Rayovac batteries 😉

Excellent question. I thought part of Tesla’s strategy was to leverage the competition in the traditional sectors (mostly mobile electronics) that have been driving battery development. It seems counter to that to be so reliant on Panasonic…

I wonder if the battery capacity issue is in regards to Gen III. If that is the case, Panasonic could be the only company with the new cell chemistry that will make the vehicle possible.

I’m sure Tesla chose Panasonic for a reason. Sometimes people think the solution is to alienate an important supplier with traditional threats. That has been the way of the old business model and we have seen what that has done.

They did shop around, and Panasonic is the best they’ve found. The idea is to used commodity cells (at standard sizes – 16850, 26650, etc.) and build around that for the battery pack, instead of the umpteen different prismatic form factors.

If someone came out with a standard sized cell and had twice the performance as Panasonic, and could produce in the volumes necessary for Tesla, they’d qualify it and then switch. But that hasn’t happened yet. And I don’t know if it will for another few years at least.

Salton Sea, in So. Cal, has 200-400PPM lithium in that big lake, somewhat between LA and San Diego. I’ve wondered if it will soon become a source. CA is getting more involved with desalination tech, albeit for the water, more than the salt.

Next door, Nevada has about 10-15M metric tons of LCE (lithium carbonate equivalent) ready to be mined. The shortage wont be Lithium, it might be other ingredients that go into the battery.

Big problem for auto manufacturers may be single-sourcing a primary component. Why doesn’t Tesla dual-source batteries? Why is Panasonic the only one to provide what is, perhaps, a commodity component.

I was under the impression that while Panasonic is their primary supplier, they did have a backup source (or two?) should something happen to them… It would be crazy to rely on a single manufacturer for such a critical part of their product.

But then again many other companies seem to do so for their electrified vehicles…

I read “Panasonic, look at our stock price, we’ve got options, baby: *make us mo batteries and cut us a deal!*”

Seriously, there’s one thing Tesla is determined to do: make volume electric cars.

That means they need lots of cheap cells! That might mean more vertical integration, like actually slapping cells together themselves. Probably not, but it’s possible. They could also buy a battery maker. They could probably never compete with Panasonic’s ability to offshore some of the process to China–but I may be wrong, all the Tesla-bound cells might be fully made in Japan. That would bode better for the vertical integration option. Costs would be higher in CA than jp, but still would cancel out shipping and cutting out the middle man.

But more than likely, he’s announcing to Panasonic that he’s shopping around. And factually, he’s actually done the math (of course) and has noticed that worldwide lithium cell production needs to go up fast in order to maintain a growing EV market.

Tesla will be fine, Elon is a genuis