Tesla Motors is now 80% Vertically Integrated - Electrek

[Bimbels]

Good news?

Tesla is now ~80% vertically integrated, says Goldman Sachs after a Tesla Factory visit | Electrek

 

[neroden]

We all suspected this. This is a result of several things:
(1) substandard suppliers who simply couldn't supply what they promised, causing Tesla to switch suppliers or bring things in house
(2) when Tesla found a critical supplier who was trustworthy, Tesla wanted to get in the "front of the line" for all orders from that supplier -- hence, the purchase of Tesla Tool And Die
(3) "clean sheet" design which rendered large amounts of parts *unable* to be supplied by existing suppliers without all-new tooling

Is it good news? The good side of it is that Tesla captures a much higher percentage of the value chain, and that Tesla has much more control over quality. The downside is, of course, that *all* of the capital funding needed for this has to come from Tesla! The partnership with Panasonic is an important exception to that, though.

 

[brianman]

On the battery front, Goldman Sachs says Tesla’s battery pack cost is at about $200 per kWh, which would bring the cost of the company’s smallest pack at $14,000 (70 kWh) and the bigger 90 kWh pack at $18,000.

Tesla’s Gigafactory in Nevada aims at reducing the cost by more than 30%, which should go a long way in helping eventually bring the cost down below $100/kWh – an important goal for the company.

70% * $200/kWh = $140/kWh

Any guesses where the other 20% reduction is expected to come from?

 

[cpa]

70% * $200/kWh = $140/kWh

Any guesses where the other 20% reduction is expected to come from?

My guess: Transportation from Asia to Oakland, across the Pacific on a cargo ship and then trucked to Fremont is a lot more expensive than shipping from east of Reno to Fremont via truck or rail. And I do not know if there are any sort of port charges or import duties that are paid on the batteries manufactured in Asia.

In addition, it is entirely possible that there could be more occasional minor delays in getting the batteries from Asia instead of domestically, thereby slowing down manufacturing efficiencies.

But this is just a guess.

 

[Skotty]

In classic Elon style, they will continue to chip away at what makes batteries expensive in the same way SpaceX is chipping away at what makes rockets expensive. I believe this alone will eventually get them to the $100/KWh mark. Just might take a little time. Plus they have to drag Panasonic along with them, who will ultimately be happy to be along for the ride but will never stop saying "wait, slow down!" as they try to make sure they don't lose battery profits in other sectors (I suspect we will eventually see a "vehicle grade" battery, which will have different specs, but the secret difference will be it allows batteries in other markets to remain more expensive).

 

[doctoxics]

Wasn't the 30 % reduction in cost of cells from the Gigafactory achieved through manufacturing efficiencies at larger scale? Additional cost reductions are also coming from a new form factor and new chemistry.

 

[AUSinator]

I think there target with the Giga factory was from the beginning for $100 for kWh. Only question is how soon until they reach there goal? From the get go or after a few years producing? Reports are coming in that materials for batteries are increasing in cost because of high demand. Some miners in Australia are very happy for the prices they are getting at the moment and are thanking Elon musk For the price rises. How much affect is that having on the price of batteries? And will that delay there goal? Then didn't Tesla buy lithium mines ?

 

[sandpiper]

Good news?

Tesla is now ~80% vertically integrated, says Goldman Sachs after a Tesla Factory visit | Electrek

This is the way that the big 3 once were. But as the suppliers got better and better, and as the suppliers were able to capitalize on volume from multiple manufacturers they gradually switched away. Of course, the fact that the big 3 were saddled by an enormous anchor (big labour) was a big motivator as well.

 

[neroden]

This is the way that the big 3 once were. But as the suppliers got better and better, and as the suppliers were able to capitalize on volume from multiple manufacturers they gradually switched away. Of course, the fact that the big 3 were saddled by an enormous anchor (big labour) was a big motivator as well.

I wouldn't blame labor. I'd blame Al Sloan; the strategy of the Big 3 became "planned obsolescence" along with selling styling. Why bother to have control over your supply chain if you *want* the parts to break after 4 years? The main reason for in-house control is quality control, and if you've made a decision to make crap (which they consciously did) then that doesn't benefit you. Of course this attitude caused their market to get destroyed by the Japanese cars in the 1970s.