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Tesla's Demand and Production Plan Scare the Company's Suppliers

If you have a few million dollars lying around (a billion would be ideal), the best course of action if you want to put them to work is building a battery production facility. These little bundles of energy don't just go in our flashlights and Walkmen anymore, but they will soon make their way into pretty much anything.
Tesla's Gigafactory 4 photos
Tesla's GigafactoryTesla's GigafactoryTesla's Gigafactory
If right now smartphones and notebooks are the preferred destinations for lithium-ion battery cells, the automotive industry is quickly catching up. Considering how the battery pack for a Tesla EV requires the same energy storage capacity as a few thousand iPhones, once the Fremont plant hits full speed with the new Model 3, we'll be looking at a very tilted playing field.

The companies that build the battery cells (the core elements that are later assembled into battery packs) know there's a surge in demand just around the corner, so they need to get ready. Earlier this year, Panasonic announced it expects to double its battery sales in three years, and much of this prognosis was based on its partnership with Tesla.

The two companies have invested heavily in Tesla's Gigafacotry, the plant where the carmaker plans to build all the batteries it needs. Recently, though, as reported by Electrek, a Panasonic official said his company fears it might not meet the demand without further investments in the production capabilities. That would mean less profit for the Japanese company in the coming years, but a very strong position on what will undoubtedly become a very important market.

This reaction from what is probably Tesla's most important partner comes shortly after Elon Musk unveiled the new direction his company is going to pursue: solar roofs and household energy storage devices. Tesla's CEO has said before that he expects to move more Powerwalls than cars in just a few years, which - considering the planned production of 500,000 Model 3s alone a year - is enough to give Panasonic headaches. Very profitable headaches, though.

And Panasonic isn't just a one-trick-poney either: the Japanese company is working with other car manufacturers as well, and they too have plans to ramp up their EV efforts in the coming years. There are going to be busy times for Panasonic, so if you do have those millions, would you be kind enough to ease off some of that pressure?


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