How Tesla Motors Inc (TSLA)’s Model S Sedan Is Powered by 7,000 Panasonic Batteries: Todd Rytting


Tesla Motors Inc (NASDAQ:TSLA) has made a supply agreement with Panasonic Corporation in 2011. This agreement was expanded towards the end of 2013. As per this extended agreement, Panasonic Corporation will supply nearly 2 billion lithium-ion battery cells to Tesla before 31 December 2017. Panasonic Corporation of America’s Chief Technology Officer, Todd Rytting talked on Bloomberg TV about the manufacturing process involved in the lithium-ion battery cells and the cost reduction initiatives.

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Rytting pointed out that the Tesla Motors Inc (NASDAQ:TSLA)’s Model S Sedan has a battery pack, which comprises around 7,000 Panasonic-made lithium-ion battery cells. He said that the main responsibility of Panasonic is to get the manufacturing process and chemistry of the batteries right. In addition to that, Panasonic also makes sure that the size of the batteries fits the Tesla’s requirements.

“Its a involved process. We have several plants in Japan […]. The goal of this arrangement with Tesla is to move that capability over to the United States, and then to drastically increase production,” Rytting said.

He added that the Tesla Motors Inc (NASDAQ:TSLA)’s Gigafactory might open up close to 6,500 jobs. He said that there are five states in the race for this factory, which are Nevada, California, Arizona, Texas and New Mexico. The main focus of research in this Gigafactory might be to increase the capacity  and reduce the cost of these batteries. Tesla Motors Inc (NASDAQ:TSLA) were facing criticism for high price tags on their vehicles. This factory would target the price reduction of their electric vehicles.

Rytting also talked about the Lithium supply and demand, and said that Panasonic will be working to optimize the manufacturing process to reduce the Lithium usage. He added that Panasonic is also working to find the suitable alternatives for Lithium. Rytting said that Panasonic is currently leading the battery market for electric vehicles, with some interesting competition around.

“[…] If you think about a gasoline car, its got fuel that makes it run, and this is the fuel that makes the battery powered car run. So you have to be careful with it, and as long as you follow correct procedures, it will be fine. But, its just the manufacturing process, you have to make sure, you know what you are doing. We know what we are doing, because we have been doing this for a while,” Rytting said on safety concerns of the batteries for EV’s.

One of Tesla Motors Inc (NASDAQ:TSLA)’s shareholders is Andor Capital Management, led by Daniel Benton. The hedge fund holds 1.25 million shares of the company.

Disclosure: None

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