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

[SteveG3]

Rob, thanks for posting this.

Definitely agree with grain of salt sentiment.

That said, I'll add more speculation . It makes sense that they are talking with Samsung, however near or close to an agreement. I think any negotiations are likely more driven by the need for future GFs than S/X. Joining in on GF1 was a very big move for Panasonic. Elon's admitted general references to future growth seem to imply GF2, GF3 perhaps in development before GF1 fully operational. If Panasonic doesn't want to move that fast, call Samsung. If Tesla were to do GF(s) with Samsung, it would make some sense to collaborate on some S/X battery supply rather than cold starting partnership with a GF size project.

 

[chickensevil]

Rob, thanks for posting this.

Definitely agree with grain of salt sentiment.

That said, I'll add more speculation . It makes sense that they are talking with Samsung, however near or close to an agreement. I think any negotiations are likely more driven by the need for future GFs than S/X. Joining in on GF1 was a very big move for Panasonic. Elon's admitted general references to future growth seem to imply GF2, GF3 perhaps in development before GF1 fully operational. If Panasonic doesn't want to move that fast, call Samsung. If Tesla were to do GF(s) with Samsung, it would make some sense to collaborate on some S/X battery supply rather than cold starting partnership with a GF size project.

Well to even be in discussion with them to the point of coming to some kind of agreement they at least are confident in Samsung's ability to make a cell to their liking. I would assume that they would have basically the same chemistry between the two of them or else the voltages and such would be off, right?

 

[SteveG3]

Well to even be in discussion with them to the point of coming to some kind of agreement they at least are confident in Samsung's ability to make a cell to their liking. I would assume that they would have basically the same chemistry between the two of them or else the voltages and such would be off, right?

Okay going to say it in cheesy mode here- the chemistry of the cells has to be right as does the chemistry of cultures, leadership at two lead potential partners of $5 billion project. I think any earlier supply would be more about validating their ability to collaborate constructively in planning and execution than the cells compatibility (so, yes they may already be confident re the latter).

 

[chickensevil]

Okay going to say it in cheesy mode here- the chemistry of the cells has to be right as does the chemistry of cultures, leadership at two lead potential partners of $5 billion project. I think any earlier supply would be more about validating their ability to collaborate constructively in planning and execution than the cells compatibility.

Yeah, I was agreeing with you that making some cells for Tesla to go into their cars would make sense. Would let Tesla work toward integration of the cells on the same platform and ensure that they can be properly cooled and such.

 

[SteveG3]

Thanks for clarifying. Makes sense Chicken.

 

[maoing]

+ 1

With sole battery supplier from Panasonic is actually a BIG risk to Tesla supply chain. I would like see SDI and Panasonic to compete the cell pricing and eventually the gigafactory developmet in the future. This is definitely good news for long term.

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.

 

[jhm]

+ 1

With sole battery supplier from Panasonic is actually a BIG risk to Tesla supply chain. I would like see SDI and Panasonic to compete the cell pricing and eventually the gigafactory developmet in the future. This is definitely good news for long term.

It also could be a big relief for Panasonic. If they're not comfortable moving as fast as Tesla wants to go, they do not have to feel so pressured or put their reputation at risk for being Tesla's bottleneck. I think Tesla can throw as much growth opportunity at both suppliers as they are willing to take on.

 

[Zaxxon]

It also could be a big relief for Panasonic. If they're not comfortable moving as fast as Tesla wants to go, they do not have to feel so pressured or put their reputation at risk for being Tesla's bottleneck. I think Tesla can throw as much growth opportunity at both suppliers as they are willing to take on.

+1 to both jhm and maoing. Eliminating sole-source supply of *the* critical component of Tesla's product would be a good thing.

 

[maoing]

Panasonic already felt relieved, right now the bottleneck is in TM instead of Panasonic.

It also could be a big relief for Panasonic. If they're not comfortable moving as fast as Tesla wants to go, they do not have to feel so pressured or put their reputation at risk for being Tesla's bottleneck. I think Tesla can throw as much growth opportunity at both suppliers as they are willing to take on.

 

[Benz]

+1 to both jhm and maoing. Eliminating sole-source supply of *the* critical component of Tesla's product would be a good thing.

One could also say that having the power of two motors at your disposal, allows you to accelerate faster (if required) than having the power of only one motor (because that would limit your performance).

In 2015 and beyond Tesla Motors is going to have to accelerate much faster than they have done in the past few years.

 

[jhm]

Denial.

Samsung SDI denies Tesla battery deal

 

[dha]

“Even when a deal is inked with our clients, including Tesla, we do not reveal the specifications without their approval,” the company stated.


Sounds to me like they've neither denied nor confirmed the deal.

 

[EarlyAdopter]

It's interesting to note that over the years, according to their annual report, Tesla has flipped from a single supplier qualified for cells, to multiple, back to single again. From the 10-Ks:

2011 :

"While we believe several sources of the battery cells are available for the Tesla Roadster and Model S, we have fully qualified only one supplier for the cells used in each of the Tesla Roadster and Model S."​

2012:

"While we believe several sources of the battery cells are available for such battery packs, we have fully qualified only a limited number of suppliers for the cells used in such battery packs and have very limited flexibility in changing cell suppliers."​

2013:

"While we believe several sources of the battery cells are available for such battery packs, we have fully qualified only one supplier for the cells used in such battery packs and have very limited flexibility in changing cell suppliers."​

 

[dha]

It's interesting to note that over the years, according to their annual report, Tesla has flipped from a single supplier qualified for cells, to multiple, back to single again.

That is a very interesting find! As an investor I'd certainly prefer that Tesla not be 100% reliant on one supplier, but the importance of this obviously diminishes as gigafactory goes online.

 

[stopcrazypp]

“Even when a deal is inked with our clients, including Tesla, we do not reveal the specifications without their approval,” the company stated.


Sounds to me like they've neither denied nor confirmed the deal.

I think they are saying the deal is still being worked out (as it has been for a while) and that even after they sign the paperwork they won't reveal specifics without approval (however, they would be willing to admit the existence of a deal).

So if they had a deal already they would have no problem announcing it, just not the details.

 

[MikeC]

“Even when a deal is inked with our clients, including Tesla, we do not reveal the specifications without their approval,” the company stated.


Sounds to me like they've neither denied nor confirmed the deal.

I read that as confirmation that Tesla is a client.

Here is the thread from a year and a half ago when negotiations might have started: Tesla in negotiations with Samsung

This article: Tesla Motors Inc (TSLA) Becoming , also from July 2013, says:

"However, the Wedbush analysts say that don’t see it to be practical for Tesla Motors Inc (NASDAQ:TSLA) to arrange for dual supply until it begins building battery packs for the Model X crossover vehicle because of the complexities involved in using cells from more than one supplier. They said the characteristics of the cells would be different, so it would be unlikely that the cells from the two companies would be able to mixed together in the same battery pack without some extensive testing to support the design changes."

Considering they are talking about getting cells for the S/X from the GF, I think that cells are still a significant constraint. Diversifying and expanding with Samsung is great news, and it's just going to suck up even more supply from the legacy automakers before they can even make a car that can use it.

 

[ggr]

It's interesting to note that over the years, according to their annual report, Tesla has flipped from a single supplier qualified for cells, to multiple, back to single again. From the 10-Ks:

2011 :

"While we believe several sources of the battery cells are available for the Tesla Roadster and Model S, we have fully qualified only one supplier for the cells used in each of the Tesla Roadster and Model S."​

2012:

"While we believe several sources of the battery cells are available for such battery packs, we have fully qualified only a limited number of suppliers for the cells used in such battery packs and have very limited flexibility in changing cell suppliers."​

2013:

"While we believe several sources of the battery cells are available for such battery packs, we have fully qualified only one supplier for the cells used in such battery packs and have very limited flexibility in changing cell suppliers."​

One is a limited number. (... and the loneliest number there will ever be ...)

 

[JRP3]

But two can be as bad as one, it's the loneliest number since the number one.

 

[EarlyAdopter]

One is a limited number. (... and the loneliest number there will ever be ...)

Yes, but it would not be correct to call one "suppliers" (emphasis on the pural form of supplier).