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GM new Lordstown, OH battery plant and Ford's need for future battery packs

ChasingCoral

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Don't forget that the LG Chem plant in Wroclaw also just received major EU funding to triple its capacity.
 

dbsb3233

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Don't forget that the LG Chem plant in Wroclaw also just received major EU funding to triple its capacity.
Yep. Among many other new battery plants and expansions in the works. Per this article:

"The lithium-ion batteries market is expected to grow over 10X from 2019 to 2030."

https://www.businesswire.com/news/h...ionary-Lithium-ion-Battery-Market-2019-2025--

Here's just a partial list of new plants coming:

https://www.argusmedia.com/en/news/2107136-lithium-battery-makers-plan-new-round-of-plant-projects

Many of these are for 3rd party supply, not as dedicated partnerships with a single manufacturer.
 

Njia

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We can't know the future. Ford's making their bet, and other companies are making theirs. One of them, none of them, or all of them will be correct. And it's early yet - EVs still represent a small fraction of total vehicle sales.

Moreover, Tesla isn't just developing the batteries; the electric motors are theirs, too. Ford is sourcing its motors from Borg Warner. Is that a mistake? What about software development? Today's OEMs, save Tesla apparently, don't think it's in their best interests to develop everything in house. Both models can work.
 

dbsb3233

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We can't know the future. Ford's making their bet, and other companies are making theirs. One of them, none of them, or all of them will be correct. And it's early yet - EVs still represent a small fraction of total vehicle sales.

Moreover, Tesla isn't just developing the batteries; the electric motors are theirs, too. Ford is sourcing its motors from Borg Warner. Is that a mistake? What about software development? Today's OEMs, save Tesla apparently, don't think it's in their best interests to develop everything in house. Both models can work.
And they may decide to do more in-house if/when the volume justifies it. But 50,000 MMEs is just a scant 1% of Ford's annual vehicle production.
 

LYTMCQ

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100% accurate. Yes it is a Panasonic factory that shares space with the Tesla production in NV but it is a Panasonic battery. In China the suppliers are CATL and LG and some Panasonic legacy units until the CATL and LG assembly plants are fully online which is happening now.

Tesla would have to buy out Panasonic's shares in Tesla and NV plant for Tesla to claim they were making their own battery.

To the main point, batteries are going to be supplied by third parties for all the car mfgs including Tesla.

Batteries are much more of a commodity than engine in regard to car mfg.
 

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The limitation with battery production isn't just lack of battery production facilities. Much of the limitation comes down to the metals required for the batteries (specifically cobalt which is primarily mined from the Democratic Republic of Congo). I'm minutes away from an LG Chem battery plant in Holland, Michigan that could build the same batteries for the MME but Poland currently has greater supply of needed metals to meet production numbers.
 
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Billyk24

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On a $10,000 battery pack paying 10% profit margin to LG means you're doomed. -----o_O for numbers and profit margins that are not known.
 

dbsb3233

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Panasonic isn't donating their time and expertise to Tesla for free at the joint battery plant. They're still taking a cut out of each battery pack.

And Tesla invested a lot of money to build that battery plant. Those costs have to be recovered too.

Maybe a dedicated joint operation can save them a few $hundred on each battery pack (hardly the difference in success or failure of a $50,000 automobile model) and a more secure supply chain. But it also creates more risk. Locks in a lot of sunk investment into that facility. It's a successful gamble when the battery market is tight (less supply than demand), but it could easily reverse as all these new battery gigafactories around the world come online in the next few years, potentially flooding the market. We could end up with oversupply and falling prices. At which point those that just buy from 3rd party without all the sunk costs could end up getting the better prices.
 
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dbsb3233

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Probably not very soon, but with 115 new major battery plants planned around the world (see above), it could be a different story in 5 years.

I've been watching this supply-demand seesaw cycle happen in the oil industry for many decades. It's entirely possible the same could happen with the battery supply.
 

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You have it backwards. Panasonic is a big and early investor in Tesla with Panasonic building a battery mfg plant inside the Tesla building Panasonic helped finance.

And going forward into China, CATL and LG.

Outside battery suppliers are the norm.
 

ChasingCoral

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What makes you think Ford wouldn't want a profit off their batteries? It's also more than profit. Cost recovery for R&D and battery plant construction come in no matter who builds it.
 

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The Nissan story is a reason why making your own factory doesn't necessarily pay off. They spent around $1 billion for their factory, but ended up selling a majority interest of it after trying to sell it outright. There are many companies offering batteries, and at the moment it is unknown what contracts Ford has with the various vendors. SK will have a factory open in the US this year and is planning to expand it to twice the size.

One of the biggest liabilities vendors take on is warranty. Since the batteries may have up to 10 years of warranty, having a vendor be responsible is a better situation for a new design. Because it's clear there will be significant technology changes in that 10 years.
 



 









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