Tesla has a secret lab trying to build its own battery cells to reduce dependence on Panasonic

KEY POINTS

  • Tesla is developing the means to manufacture its own battery cells, current and recent employees told CNBC.
  • The main cost component of an EV is its battery pack and battery cells, according to research by IHS Markit.
  • Since 2014, Tesla has mostly relied on its partner Panasonic to produce battery cells for its vehicles and clean energy products.

Tesla is developing the means to manufacture its own battery cells, according to five current and recent employees, something that the electric vehicle maker has relied on Panasonic to do since the companies signed an extensive partnership deal in 2014.

The move could help Tesla offer cheaper, higher-performance electric vehicles than it does today, without having to pay or share data and resources with outside vendors or partners. The battery pack and battery cells are the main cost component in an electric vehicle, according to research by IHS Markit.

The company has been “battery-constrained” in the past, CEO Elon Musk acknowledged at the company’s annual shareholders meeting earlier in June. That means a lack of batteries limited Tesla’s production and sales of electric vehicles and energy storage systems (Powerwalls and Powerpacks).

Making its own battery cells would also fit with Musk’s general ambition to make Tesla as “vertically integrated” as possible, which means developing, manufacturing and selling everything it can — even its own enterprise software.

But manufacturing cells at high volume would be another challenge for a company that recently implemented cost-cutting measures and is still struggling to perfect its high-volume vehicle production.

Tesla and Panasonic did not respond to requests for comment…

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