At Current Rates, Tesla Could Soon Suck Up Worldwide Supply of Li-Ion Cells

cartechboy writes "Lets just say Elon Musk may need to go battery shopping, like, big-time. Here's some little-understood Tesla math that could turn the global market for cylindrical lithium-ion cells upside down by 2015. It turns out the massive Model S battery takes almost 2,000 times the number of cells a basic laptop does. Assume Tesla just doubles production from its current 21K cars/year to 40K cars/year. (Something it expects to do by 2015). At that point, Tesla would require the *entire* existing global capacity for 18650 commodity cells. That assumes no other growth, no next gen model, nada. What should Elon do? Better get on the horn to Panasonic and Samsung."

Comments

On the plus side...

[fuzzyfuzzyfungus]

Our newfound infatuation with extremely flat laptops that have about as many user-servicable parts as 2001's Monolith means that demand for 18650 Li-ion cells in laptops should be plummeting! Problem solved.

Now we just need to go liberate whoever is living on top of our lithium, and we are good to go.

Re:On the plus side...

[X0563511]

Perfect example of patents stifling progress instead of encouraging it.

Re:On the plus side...

[sl4shd0rk]

Perfect example of patents stifling progress instead of encouraging it.

It's an even better example of patents serving the precise purpose they were designed to prevent.

Re:On the plus side...

[Areyoukiddingme]

So why exactly are you demonizing oil companies in your post? Sounds like they played a big role in creating these large-format batteries.

Because they used their battery patent to force Toyota to not only discontinue manufacturing their first pure-electric RAV4, but also pay a large fine for daring to do so. That vehicle was their CUSTOMER, and they killed it with a lawsuit. Toyota would have been paying them royalty money for over a decade, on potentially tens of thousands of vehicles worth of batteries, but they insisted on total shutdown of production instead.

That's how much oil companies fear the possibility of a successful electric car. They're not "energy companies", all branding efforts to the contrary. They're oil companies. They act exactly the way oil companies have acted for over a century.

Statistical fallicies

[Anonymous Coward]

If we extrapolate this curve and assume everything else remains constant, DOOOOOOOOOM!!!!

But it gets the clicks, and that's all that matters on the tubes.

Re:Statistical fallicies

[JWW]

Yep. In fact probably many someones.

The way capitalism works is demand first, then supply shows up. It can't even be done the other way around.

In fact this large demand is going to be what eventually causes prices for batteries to go down, because, like I said before, many companies are going to get into this business...

Re:Statistical fallicies

[h4rr4r]

There were no smartphones before the iPhone? Really? There was no desire for portable computing?

There was no demand for cars before Tesla?

Demand exists before supply. If no one wanted to ever go faster than a horse the car would never have been a success.

Do I lack reading comprehensiosn skills?

[oodaloop]

So if Tesla doubles production, it would consume the entire world's production of li-ion cells. So the measly 21k cars Tesla produces use half of the world's production already? Maybe I can't read and/or do math though.

Re:Do I lack reading comprehensiosn skills?

[Rob the Bold]

So if Tesla doubles production, it would consume the entire world's production of li-ion cells. So the measly 21k cars Tesla produces use half of the world's production already? Maybe I can't read and/or do math though.

It's not your math, it's the lack of data in TFAs. I can't find the number of cells per Tesla battery in any of the articles, either. Maybe I just got bored paging through. Stupid ADD. Anyway. searching around gives guesses of 7500 to 8000 cells in the top-of-the-line pack. So another 20000 cars would be 160 million more cells. If a laptop uses four to eight cells per battery, that's a lot of laptops worth of cells.

Rather Breathless Headline

[Rob the Bold]

We start with some seriously breathless doom-and-gloom headlines and summary, then reading the articles we find this sort of thing:

The carmaker's rapid production scale-up has prompted Panasonic to expand capacity, by reopening previously idled plants, while simultaneously committing to build entirely new production lines.

So prices had been dropping, production had been cut, but now at least one cell maker has restarted idled lines. That doesn't exactly sound like a disaster in the making.

price competition via supply shortfall.

[goombah99]

I wonder which has the better profit margin, electronic devices or Tesla? Presumably that decides how this plays out. The interesting thing is that it's going to become a barrier to entry for electric car makers. The one with the highest profit margin can set the price of the batteries above the profit margin of the competition when there is a supply shortfall.

Re:price competition via supply shortfall.

[timeOday]

Or economies of scale will kick in and the batteries will get a lot cheaper.

Re:And, Li-Ion batteries are improving exponential

[smith6174]

Seriously, putting an r-squared value on the chart for apparently FOUR data points? Scientist card revoked.

Re: Markets, how do they work?

[Anonymous Coward]

Considering that you can now buy 3.4Ah 18650s (NCR18650B) when just a few years ago 2.4Ah was the biggest available, I'd say we keep right on having the tangible breakthroughs. The trouble is, we keep seeing news articles about some battery tech which will double current battery capacity, and is about ten years from market. But we never see that "double" jump, next year we just get 7% more capacity and another tech in the lab that will eventually, when it hits the street, double current capacity. So we get disillusioned and think the lab advances never translate into reality, even though capacity is doubling every decade (or so), it just happens in a cascade of incremental improvements each of which was deceptively hyped in the media by comparing it to current production, rather than to other battery tech at a similar stage of development.

Analogy to Apple

[necro81]

There was a time when there was this thing called the iPod, and it had a small magnetic hard drive inside it. iPods were really big business - hundreds of millions were made. iPods practically cornered the market for 1.8" hard drives for a while. The world did not end.

More recently, Apple started producing iPods and, later on, entire freaking phones, tablets, and computers that did away with the spinning magnetic discs in favor of flash memory. Apple sold of lot of those, too, and for a long while has consumed a large fraction of the entire world output of flash memory. Lo and behold: world output increased to match demand.

If anything, these facile comparisons should give Elon Musk an idea: pre-purchase huge swaths of 18650s as a strategic move, just as Apple has done for flash memory and touchscreens over the years. Doing so would ensure the lowest possible price, a consistent supply chain, and make it harder for competitors to enter the market on equal terms.

Re:so glad for the solution

[swillden]

A) Zero pennies now, for getting big profits in the future by controlling its own Lithium production.

B) Small profits now, letting the corporations get the lionshare forever.

Or maybe C) Zero pennies ever, if some other battery tech replaces Li-ion before they get spun up.

The smart move would be to sell lithium now for its raw material value while setting up battery production for the future. Don't leave money on the table now while preparing to step up the food chain.