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Elon Musk Hints At Tesla Taking Over Battery Cell Production

During Tesla’s 2019 shareholders meeting, CEO Elon Musk hinted at the fact that his company may have found a solution to its ongoing Panasonic problem: by producing its own battery cells.  Tesla battery production would allow the company to reduce costs and provide a more dependable source of battery cells for the manufacture of its many products. 

As of May 16th, Tesla had officially acquired Maxwell Technologies. Maxwell is a manufacturer of electrochemical capacitors and the developer of a new dry electrode technology for the production of batteries.  Why buy a battery company if you are not preparing to use it to your full advantage?

While Musk did not want to confirm this assumption now, he did say that more information will be revealed near the end of the year at the “Battery and Powertrain Investor Day” that Tesla plans to have.

Tesla Seeking In-House Battery Production

It is no secret that Tesla’s relationship with Panasonic has grown rockier over the past few months, and according to Japanese news outlet Nikkei, it does not seem like it will be improving any time soon.  With the future of this relationship looking pretty bleak and a higher demand than Panasonic can provide as production numbers rise, Tesla may be forced to seek out a supply of battery cells elsewhere.  So an in-house solution would certainly be an attractive one.

The acquisition of Maxwell Technologies means that Tesla now has a cutting-edge, established business to integrate with their own.  “We think this is really quite strategic [..] this is a very important technology that will have a big effect on the cost and scale of cell production – both reducing the cost and capital required to scale cell production,” said Musk. 

In fact, Tesla may even get into the mining business to further control its supply chain. It has already made some deals with mining companies who provide the raw materials needed for its batteries.  “As we scale battery production to very high levels, we have to look further down the supply chain and we might get into the mining business… I don’t know. A little bit at least. We do whatever we have to to ensure we can scale at the fastest rate possible,” said Musk.

A Souring Relationship With Panasonic

Right now, problems continue to crop up with its Panasonic partnership.  Back in April, Elon Musk blamed production delays on Panasonic, making it sound as though they were not providing Tesla with batteries in a timely manner.  He also implied that Tesla would be searching for alternative battery suppliers at its new Shanghai factory. 

Panasonic froze plans to expand its investment in Tesla’s Gigafactory 1 around the same time.  It will also suspend additional investment in Tesla’s Shanghai plant.  Considering Tesla’s poor Q1 financial report and Elon Musk’s continued spats with the U.S. Securities and Exchange Commission, it is no wonder that Panasonic is feeling unsettled by their relationship with Tesla. 

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