The Korea Times "2018, Samsung SDI may handle 40 percent of Tesla demand"

8% this year?

Could it be that they supply cells for 60 kwh cars?

RobStark said:

Samsung SDI to supply more batteries to Tesla Samsung SDI is expected to account for about 8 percent of Tesla battery demand this year, worth 36 billion won. It expects to raise that portion to 40 percent in 2016, with sales to the American company rising to 254 billion won. "From next year to 2018, Samsung SDI may handle 40 percent of Tesla demand," said another source directly involved with the issue. Samsung SDI said nothing has been decided. Samsung SDI's target for EV batteries is considered as rather aggressive. But optimists say EVs remain economically-viable with gas at $2 per gallon. Even with plunging oil prices, analysts say the economics for EVs is well supported as they are still at parity with conventional vehicles after 5 years of ownership at the current gas price level. Tesla CEO Elon Musk expects to sell "a few million EVs a year by 2025. The company will soon start building two new factories, one each in Europe and Asia. To that extent, Tesla needs additional battery partners.

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"Samsung SDI is expected to account for about 8 percent of Tesla battery demand this year"

Meaning that 8% of the total vehicle production of 2015 will have Samsung SDI battery cells?

I thought they had enough shipments of Panasonic battery cells coming from Japan to produce 150,000 to 200,000 vehicles.

What has caused the change of plans?

- - - Updated - - -

RobStark said:

I read a while back than Panasonic has exclusive right to supply first generation Model S .

But not Model X. So 8% may be for Model X.

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Let's say it's even 10% instead of 8%.

Then we can calculate this:

Total vehicles 2015 : 10% Model X production
50,000 : 5,000
60,000 : 6,000
70,000 : 7,000
80,000 : 8,000
etc.

That would mean that the total Model X production will certainly not be higher than 10,000 in 2015 (if those Model X battery cells really will have to come from Samsung SDI instead of Panasonic).

Not very likely, I think.

Could it be that those Samsung SDI battery cells will be used in stationary battery packs only?

36 billion WON is about US$ 33 million.

Assuming Tesla's 2015 production is 60.000 cars x 7k cells is 420 Million cells.
8% = 33,6 Million cells.

Pretty good price, less than US$ 1,-- per cell.
US$ 7.000,-- for all cells in a 85 kWh pack, US$ 82 per kWh.

More likely something is not correct in the article. However, it is still very interesting news, great find !

This is awesome news. I hope we get more detail from Tesla this week, CC perhaps. Has there been an SEC filing yet for this agreement?

Something i dont quite understand is that there is a agreement between Tesla and Panasonic for 2014-2017, Panasonic would increase the production and Tesla would procure the cells from them (at least 1,6 Billion over the timeframe, at 7000 cells /car, enough for 230k cars, or 200k cars for next 3 years).

So only way i could explain it is by using it for stationary storage as these are cheaper

RobStark said:

Samsung SDI to supply more batteries to Tesla

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Excellent dig, thank you, RobStark!

I will provide references tonight, but this 40% seem to be related to the supply of the batteries for MX/MS, and taking their production from the 120k per year covered by Panasonic to 200k that Elon mentioned as a max for the battery supply, not counting the GF output. Note that 80K is exactly 40% of 200K.

The approximately 120K cars worth of the battery supply per year from Panasonic could be arrived at by considering the 1.8B cells contract with Panasonic, and backing out the 2013 and 2014 production for Model S (say 55K cars).

So this is the first independent information indicating that Tesla is really serious about the 200K run rate for MS/MX, and doing some serious planning for this running rate. It is obviously also an indication that they have good internal data on incoming order rate to be confident enough to be planning for the 200K rate on MX/MS.

I think that if information in this article is true, we are very likely to hear more on this during the call. This is very good news indeed.

Just to add, I don't think chemistry would be an issue since from my understand Tesla has just as much input on the chemistry as Panasonic provides. Keep in mind that JB's expertise is batteries, so you better believe he knows what goes into making a good battery. From a video I watched a while back that a professor put on for his students on some battery testing platform he was working on to determine cell life I learned that the electrolyte mixture is generally where the "secret sauce" is for a battery these days. So it could be possible that Tesla is the one who told Panasonic what they wanted for their mixtures. This would make it almost like when you put an order out there for someone to make you a PCB. It can be made by any fab that is able to print boards and chips to the detail that you want. I wouldn't put it past JB to know enough about batteries to make that happen.

So, this is believable that they would second source from Samsung. I am sure Panasonic isn't happy about losing some of the business, but they just don't have the capacity to make it happen.

I believe a while ago there was news floating around about them talking with Samsung for a possible battery deal (what, like a year ago, right?) so this is likely the fruit of that deal.

Or the article is wrong.

vgrinshpun said:

Excellent dig, thank you, RobStark!

I will provide references tonight, but this 40% seem to be related to the supply of the batteries for MX/MS, and taking their production from the 120k per year covered by Panasonic to 200k that Elon mentioned as a max for the battery supply, not counting the GF output. Note that 80K is exactly 40% of 200K.

The approximately 120K cars worth of the battery supply per year from Panasonic could be arrived at by considering the 1.8B cells contract with Panasonic, and backing out the 2013 and 2014 production for Model S (say 55K cars).

So this is the first independent information indicating that Tesla is really serious about the 200K run rate for MS/MX, and doing some serious planning for this running rate. It is obviously also an indication that they have good internal data on incoming order rate to be confident enough to be planning for the 200K rate on MX/MS.

I think that if information in this article is true, we are very likely to hear more on this during the call. This is very good news indeed.

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Well, let's see if we will get some more details during the Conference Call on Wednesday.

JRP3 said:

Or the article is wrong.

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+1

This article reads like someone grabbed a bit of speculation from here, there and everywhere. The company will soon start building two new factories, one each in Europe and Asia. The truth is Tesla has only 'talked' about building factories. There's been no 'soon' date, but rather 'top of my head possible dates if things go according to my (Elon Musk) plan'. Those (car) factories can't be built before a corresponding gigafactory. And then we have the typical "No comment/won't confirm or deny" from Samsung.

Gerardf said:

36 billion WON is about US$ 33 million.

Assuming Tesla's 2015 production is 60.000 cars x 7k cells is 420 Million cells.
8% = 33,6 Million cells.

Pretty good price, less than US$ 1,-- per cell.
US$ 7.000,-- for all cells in a 85 kWh pack, US$ 82 per kWh.

More likely something is not correct in the article. However, it is still very interesting news, great find !

Click to expand...

This is a great calculation. We may need to wait until CC to get guidance that confirms 60k cars this year. But in the meantime as a little sensitivity analysis, I find that just 50k cars would imply a cost of $97/kWh vs. $81/kWh for 60k. So even at the conservative cost of $97 per kWh of cells and another $4000 for the rest of the pack we get to an 85 kWh pack cost of $12,245. This seems incredibly cheap to me. At $81 per kWh cells, this leads to $10,885 per 85 kWh pack. This would be absolutely fabulous. Can someone challenge this? It seems too good to be true.

jhm said:

This is a great calculation. We may need to wait until CC to get guidance that confirms 60k cars this year. But in the meantime as a little sensitivity analysis, I find that just 50k cars would imply a cost of $97/kWh vs. $81/kWh for 60k. So even at the conservative cost of $97 per kWh of cells and another $4000 for the rest of the pack we get to an 85 kWh pack cost of $12,245. This seems incredibly cheap to me. At $81 per kWh cells, this leads to $10,885 per 85 kWh pack. This would be absolutely fabulous. Can someone challenge this? It seems too good to be true.

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It is too good to be true. Elon said we'll go below $100/kwh only after GF. Without GF, its almost impossible.

I would not read too much into this article as a similar article showed up more than a year back without anything materializing with SDI. Instead, Tesla stayed 100% with Panasonic.

Agreed, this article may contain very little accurate information, and certainly the statement that Tesla will "soon" build two additional factories is incorrect by any reasonable interpretation of the word "soon".

Krugerrand said:

This article reads like someone grabbed a bit of speculation from here, there and everywhere. The company will soon start building two new factories, one each in Europe and Asia. The truth is Tesla has only 'talked' about building factories. There's been no 'soon' date, but rather 'top of my head possible dates if things go according to my (Elon Musk) plan'. Those (car) factories can't be built before a corresponding gigafactory. And then we have the typical "No comment/won't confirm or deny" from Samsung.

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I still mainly see one source that various refer to.


There is an old article in 2013 about earlier talks :

http://www.reuters.com/article/2013/10/04/us-korea-autos-tesla-idUSBRE99306020131004

pGo said:

It is too good to be true. Elon said we'll go below $100/kwh only after GF. Without GF, its almost impossible.

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I would interpret this $100 mark as pack price per kWh. So $10,885 pack cost is $128 cost per kWh. Grossing up by 30% gets us to a price of $182 per kWh. So this is nowhere close to where the Gigafactory can take prices, but it is quite good.

Gerardf said:

I still mainly see one source that various refer to.


There is an old article in 2013 about earlier talks :

http://www.reuters.com/article/2013/10/04/us-korea-autos-tesla-idUSBRE99306020131004

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This older article is helpful. It is clear that the talks in 2013 were about supplying the Model X. So naturally this led nowhere fast since we are still waiting on the Model X. It seems entirely plausible that both companies would continue to be in conversation. Moreover, about now would be the time for such a deal to become public knowledge if such a deal is to happen. I hope CC will clear this up.

Gerardf said:

36 billion WON is about US$ 33 million.

Assuming Tesla's 2015 production is 60.000 cars x 7k cells is 420 Million cells.
8% = 33,6 Million cells.

Pretty good price, less than US$ 1,-- per cell.
US$ 7.000,-- for all cells in a 85 kWh pack, US$ 82 per kWh.

More likely something is not correct in the article. However, it is still very interesting news, great find !

Click to expand...

They probably used 50,000 units as this year Tesla production estimate. That would give $1.18 per cell, not less than a dollar per cell. But it is really hard to say what their assumption was(could be very conservative one).

And another thing, FOB price in Asian port would be different from one Tesla see on cells delivered to factory, not only because of transportation costs, but also due to custom fees and taxes. So Elon and SDI could be talking about same contract but using prices relevant to their businesses(SDI don't care much about local american taxes, while Tesla really cares what their actual expenses to get cells were).

Another supplier of battery cells would be positive news. We might get some more details during the Conference Call on Wednesday, if someone will ask questions about this subject.