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Tesla Gigafactory blamed for global shortage of cylindrical batteries

Wednesday, December 6, 2017 10:35
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A new report by South Korea’s etnews points to Tesla as being the root cause for an ‘extreme’ global shortage of cylindrical batteries. Industry sources have reportedly blamed Tesla’s Gigafactory for consuming supplies of lithium ion batteries by partner Panasonic, as the company diverts its attention to address production challenges being faced at the $5 billion battery plant in Sparks, Nevada.

“It is impossible to purchase cylindrical batteries within Japan and we were even notified by Panasonic that they are not going to sell cylindrical batteries anymore.” said a representative for a Japanese battery distributor, according to etnews. “It has come to a point where we cannot even purchase products from Samsung and LG and even products from Samsung and LG that were produced in China.”

The alleged shortage of battery cells have given way to increased interest in supplies from Samsung SDI, maker of lithium ion cells that are used in the South Australian Tesla Powerpack farm, LC Chemical, and Murata (previously Sony). However, companies looking to purchase cylindrical battery cells from Tesla’s competing manufacturers have been met with little success. Many of these manufacturers are already locked into supplier contracts for the first half of 2018, as demand for battery powered products, even beyond electric vehicles, continues to soar. Consumer products ranging from electric bicycles and e-mobility devices, to cordless products for the household market, have all put a strain on the supply of batteries.

“As a result, many global IT, non-IT, electric vehicle, and home appliance companies have been left with no batteries for many months.” reports the etnews.

Tesla, in conjunction with partner Panasonic, continue to work through its battery production issues, which as of late, has more to do with challenges faced on the battery pack assembly line for Model 3 versus actual cell production.

The Silicon Valley electric car maker noted in its third quarter 2017 earnings report, “To date, our primary production constraint has been in the battery module assembly line at Gigafactory 1, where cells are packaged into modules.” Although Tesla did not provide guidance on how this bottleneck will translate to year-end Model 3 production numbers, the company did note that throughput is expected to increase substantially in November.

Tesla expects to reach Model 3 volume production of 5,000 vehicles per week late in the first quarter of 2018.

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