The unparalleled success of the Tesla Model S sedan has eaten up the world’s supply of lithium-ion laptop batteries, causing the electric automaker to sign a $7 billion agreement with Panasonic for even more battery packs. But Tesla could end up building the world’s largest battery factory, with the same output as all the rest of the world’s battery producers combined.
Securing enough batteries has been a major stumbling block for Tesla, which tripled its initial deal with Panasonic on the heels of growing sales. The deal is good for as many as 300,000 85 kWh batteries, though Tesla has far greater ambitions beyond that. Unfortunately, Tesla has had to slow sales to North American customers to ensure European buyers have a crack at the electric sedan.
This has Musk seriously considering build a “giant facility” most likely in North America that would be a “soup-to-nuts” factory building batteries from the ground-up. Musk says the factory will be eco-friendly and feature a battery recycling program, and would be able to produce as many batteries per year as the rest of the world’s lithium-ion battery suppliers.
It’s a bold plan that will cost billions to bring to fruition, but I’ve learned not to doubt Elon Musk. If he says he is going to build the world’s largest lithium-ion battery factory, then more likely than not that’s exactly what is going to happen, perhaps with a few caveats and/or asterisks thrown in for good measure.