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Tesla Could Be Hogging Batteries and Causing a Global Shortage, Says Report (gizmodo.com) 154

According to a report from the Korea news outlet ETNews, Tesla's solution to fixing a manufacturing bottleneck responsible for a $619 million loss last quarter could be causing a global battery shortage. Panasonic reportedly gave most of its cache of batteries in Japan to Tesla so that the automaker and Gigafactory 1 energy-storage company could keep up with its ambitious production schedule. Gizmodo reports: In early October, Tesla struggled with a "production bottleneck," but by the end of the month, Panasonic stated it would increase battery output at the Gigafactory, now that it understood the issues that led to the bottleneck and could automate some of the processes that had been done by hand. But this likely did not help Tesla fix any immediate shortage issues. ETNews claims that Panasonic is coping with the shortage by shipping batteries in from Japan. And many Japanese companies in need of cylinder batteries have turned to other suppliers like LG, Murata, and Samsung -- but those companies have not been able to meet the demands. Reportedly, companies that had contracts before 2017 aren't affected by the shortage, but several other manufacturers have not been able to place orders for batteries, and won't be able to order more batteries until the middle of next year.

Tesla Could Be Hogging Batteries and Causing a Global Shortage, Says Report

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    • by Rei ( 128717 ) on Thursday December 07, 2017 @06:22PM (#55698701) Homepage

      When the very summary is wrong, where does one even start? "Most" cobalt is not in the Congo. The cheapest primary cobalt is found in the Congo, with the caveat that it's not been that heavily explored due to previous levels of demand (there's a new wave of exploration at present). Cobalt, however, is found in significant consequence everywhere that nickel, copper, and many other commonly mined metals are. Some places recover it in the tailings, but most don't bother because, again, historically demand hasn't justified it.

      Cobalt isn't a rare metal. In the crust, it's 2-3 times as common as lead, 40% as common as copper, a third as common as zinc, etc. Nor is it "spread out"; as mentioned, it's associated with many commonly mined minerals.

      As for mining in Congo itself: at least 80% is mined in big international mines with modern equipment and practices; how much "over 80%" is uncertain. The remaining percentage is so-called "artisinal mining" - improvised mines mined with manual labour and primitive equipment (aka, generally not very safe). Some are villages mining their own land, while others are outsiders exploiting locals. In the past year, there's been a big crackdown on artisinal cobalt, with major buyers taking steps to track the origin of their products better and keep it out of their product streams. Of course, one can always expect artisinal producers to try to do more to hide the origins of their cobalt, and/or sell to less scrupulous buyers (such as in China).

      • by Anonymous Coward

        Fuck you! I want single-source artisinal cobalt hand smelted and machined into a battery to sell to gullible hipsters.

      • by Aighearach ( 97333 ) on Thursday December 07, 2017 @07:31PM (#55698995) Homepage

        According to this Canadian mining company about to start operation of a primary cobalt mine in the US, 58% of world cobalt production was from DR Congo in 2015.

        http://www.ecobalt.com/assets/... [ecobalt.com]

        Before offering corrections, it is important to understand what the words mean within their context. In the context of industrial supply, where the mines are is what they are talking about when discussing the locations of a resource.

        For example, it doesn't prove them wrong to point out that there is a lot of cobalt on Venus.

        • Re: (Score:3, Interesting)

          by Rei ( 128717 )

          I did not say "most currently mined cobalt", because currently mined cobalt simply will not support battery production scaleup. I said "most cobalt", period. You have to look at where additional cobalt for batteries is going to be coming from. And it's not going to be coming from the Congo. Yes, part of the supply will come from expansions to major Congo mines, but most is going to come from new cobalt projects and from adding cobalt recovery to the tailings of existing mines.

          It's nothing at all analogo

          • It's nothing at all analogous to "cobalt on Venus". As was explicitly stated: "Cobalt, however, is found in significant consequence everywhere that nickel, copper, and many other commonly mined metals are."

            You literally did not in that statement say anything about where the metals are mined. You talked about where the metals are. That they are mined is used at the limiting factor for the set of things being discussed.

  • Business 101 (Score:4, Insightful)

    by fluffernutter ( 1411889 ) on Thursday December 07, 2017 @05:18PM (#55698337)
    Fuck everyone else. It's just good business.
    • Re:Business 101 (Score:5, Insightful)

      by ShanghaiBill ( 739463 ) on Thursday December 07, 2017 @05:38PM (#55698455)

      Fuck everyone else. It's just good business.

      As we shift from fossil fuels to batteries, we will have to ramp up production. Tesla is causing that to happen NOW, rather than in the future when it could be even more disruptive. This is a Good Thing. We need to produce more lithium, and more cobalt. We need to make more batteries, and make them cheaper and more efficiently. By bringing the inevitable supply problems forward, innovators will be incentivized to find solutions.

  • It will be interesting to see how the usual group of Musk trolls reconciles their desire to paint Tesla as a flop while grappling with data like this. They are selling product fast enough that they are causing battery supply disruptions.

    • Looks more like production problems on Tesla's side, since they already had them when they were tinkering together the Model 3 launch batch. This was only a few hundred cars, so it cannot be due to huge demand. Even now it is extremely unlikely that Tesla ist anywhere near the output that they had planned for December, so if the Gigafactory should easily be able to deliver enough cells if it was running at full capacity.
    • by Richard_at_work ( 517087 ) <richardprice AT gmail DOT com> on Thursday December 07, 2017 @05:50PM (#55698517)

      You can sell significant numbers of a product, beyond your wildest dreams, and still be losing money.

      Boeing has sold 1287 of its 787 Dreamliner series aircraft, has delivered 625 and was still losing money overall (as in deferred program debt was still rising) until earlier this year (when they managed a slight reduction). Boeing isn't forecast to make any actual profit on its current order book.

      In the commercial aviation world, 1000 sales of a large aircraft is a huge success, usually (see 777, 747, 767, A330). But then, usually, these programs have their production and R&D debt paid off in the first few hundred airframes....

      Tesla is in the same boat - massive (relatively) up front costs, coupled with significant production issues which means debt is still rising rather than being recouped.

      They will get there, but they aren't there yet.

    • 1970's:
      Kid: Daddy, my new radio-controlled car won't run!
      Daddy: Batteries not included? What the hell is this?
      Kid: Daddy, you shouldn't swear.

      2017:
      Kid: Batteries not available? What the hell is this?
      Kid's kid: Seriously, what the fuck?
      Kid: Where'd you learn that kind of language?
      Kid's kid: Are you fucking serious?

    • Taking all the batteries and still slipping on production schedule actually aligns with painting Tesla a flop. That would be the limiting factor, and even with the world's supply of batteries they cannot produce what they've taken the cash to produce.

  • So? (Score:5, Insightful)

    by GerryGilmore ( 663905 ) on Thursday December 07, 2017 @05:42PM (#55698473)
    Let's see: company (Tesla) has more need for materials furnished by a partner company(Panasonic), so orders more and partner company supplies the extra materials. Other companies WITHOUT existing supply contracts whine about being unable to buy batteries from partner company. Isn't this at some level how basic capitalism works? It's not like there aren't other battery suppliers and - yes! - demand is skyrocketing. Welcome to the real world.
    • And many others believing they will enter the EV market significantly in a couple of years are swallowing hard as they realize that this is a BYOB, as in Bring Your Own Battery, enterprise. It takes years to build the factories and the equipment that goes in them and few have started.

      The next realization will be that this is a BYOE, as in Energy, enterprise too. They can't depend on utilities to be able to react fast enough to supply exploding fleets of EVs in the mid '20s. Auto companies that can't bring t

      • No, as soon at that starts to happen the local authorities will mandate that charging stations serve the general public.

        • I don't think you understand. The general public will not need charging stations. People aren't going to be owning most of the cars. Most vehicles will be owned, maintained, powered, and operated by the manufacturers.

          The manufacturers are going to be able to drop the per-mile cost of Transportation As A Service (TAAS) to less than the per mile cost of owning your own vehicle, probably significantly less. This will make owning your own vehicle an unnecessary luxury or pain in the @$$ depending on how you wan

          • by tlhIngan ( 30335 )

            The manufacturers are going to be able to drop the per-mile cost of Transportation As A Service (TAAS) to less than the per mile cost of owning your own vehicle, probably significantly less. This will make owning your own vehicle an unnecessary luxury or pain in the @$$ depending on how you want to look at it. Once it gets started, Americans will see the advantage and flock to it. Rich people who choose to continue owning their own cars won't be admired as they pass by, they'll be laughed at. The new genera

            • Now in places that have good public transit, you'll find you can rent cars on a per-hour basis. Companies like Care2Go and others offer fleets of cars to rent.

              The monthly cost is around $150 or so (cheaper than most insurance plus maintenance fees) and the per-hour rate is fairly low, like $5 or so. Gas is included - if you need to top off the tank, there is a gas card in the car.

              The UK has several different such services. I'm signed up with a not-for-profit one, and have been for about 5 years now. Monthl

          • Naw, I probably did understand basic shit.

            I probably just don't think most Americans are going to give up personal ownership of transportation. Some will. It will be a popular product, just like buses are popular.

            It will totally kill Amtrak.

            • Many would agree with you.

              Personally, I believe it will happen. We'll give up driving. The younger folks are already doing it. I look forward to it as there are better things to do with my time, and the expense is already a ridiculous portion of income.

              In less than a decade, I expect the cost of insurance for drivers who turn the autopilot off or are driving pre-autopilot vehicles to start ramping up on a geometric curve extending over a period of 10-20 years. At the same time, availability of that insuran

              • The young tend to have lower income. The conflating variables are going to be a much larger signal than anything you can tease out already.

                People who can afford a rental car will use it in preference to a bus, that doesn't mean they won't someday buy a car.

                And why would insurance go up? That is just silly! That would push people off the insurance product. Insurance on self-driving cars is going to be much lower, longterm health for the auto insurance industry is iffy. They're going to have a lot of painful

                • It is indeed early to tell for sure.

                  Insurance will go up for the same reason it has become higher for drunk drivers. In the 70s, drunk drivers were common and rarely punished. Their insurance was the same as everyone else's. Public safety perceptions are relative and evolve. When self-driving vehicles become common, the safety difference of driving manually versus letting the car drive itself will be so extreme as to prompt movements against it. Liabilities will be higher because of the lack of responsibili

                • People who can afford a rental car will use it in preference to a bus,

                  No. They'll use the bus to get from home to the rental station (or the car's delivery driver will use the bus to get back to the office, and her (minimum wage?) pay for that time will go onto the rental charge. And the same after drop off of the rental vehicle. So each car rental will generate two bus trips on average. Slight lowering for people or rent-drivers who car pool.

          • This will make owning your own vehicle an unnecessary luxury or pain in the @$$ depending on how you want to look at it.

            It was far beyond that point when I got my driving license in 1989. It still is. Which is why I've owned a car for barely half the years that I've had a driving license. Bus, bike and train are much easier.

      • "This is a BYOB, as in Bring Your Own Battery, enterprise."

        Tesla has been described for many years as a battery company which happens to build cars.

        The powerwall and renewables battery farms should underscore that point - they're where the money is.

        Cars are merely a way to sell more batteries, which in turn generates enough demand to justify the gigafactory. once it's online, tesla/panasonic will be producing more cells than the rest of the world combined.

        Regarding utility capacity: Electricity accounts for

    • Isn't this at some level how basic capitalism works?

      Well sure. The thing with capitalism is: It's only good as long as a specific group of people profit from it.

    • At least it's not partner company gearing up for a single massive order, then going bust a couple of years later due to overcapacity and no orders.

      Apart from these kinds of blips, the market for batteries is limited by price, not by availability - meaning that if you raise the price then sales drop off in a non-linear fashion, and the same thing happens to the increase when you lower the price - the balancing act is to set the price high enough to make money but not cause a glut which would lower the price,

  • Causing? (Score:5, Insightful)

    by LordKronos ( 470910 ) on Thursday December 07, 2017 @05:51PM (#55698525)

    Wait, so the claim is that Tesla could be CAUSING a shortage?

    How are they causing a shortage? By buying up all the batteries they can get.
    Why are they buying up batteries? To eliminate their manufacturing problems.
    What were the manufacturing problems they were having? They couldn't get enough batteries.

    Oh yeah, that makes total sense. It's not a battery shortage causing Tesla to buy up batteries....it's Tesla buying up batteries that is causing a shortage.

    • Why are they buying up batteries? To eliminate their manufacturing problems for themselves.

      FIFY.
      • So? Not like they are buying all the batteries and just sitting on them in a giant warehouse to deny competitors, or shooting them into space or something. They are buying them to put into cars for resale.

        Oh no, Tesla out-maneuvered their competition by having a business partner (Panasonic) who did what was necessary to fulfill orders! For shame!

        Why does anyone give a shit?

    • Nope. They were already using Panasonic for their batteries. Yes, they've had manufacturing problems. No, they didn't switch their orders.

      Their battery production problems relating to cars was simply in the assembly of the cells into batteries! None of that has changed, they must have actually only had "problems" not a failure.

    • by CityZen ( 464761 )

      A more detailed report indicated that Tesla has been buying the parts and materials needed to make the batteries, but has yet to produce the actual batteries. By buying up all the raw materials, other sources were not able to make batteries themselves.

    • Of course, the battery cell that Japan provides goes to model S/X and not to the M3. In fact, the cell that M3 uses is made no other place. The cells that Tesla is picking up from other sources is for powerwall/packs and possibly the semi, though I doubt that.
  • by viperidaenz ( 2515578 ) on Thursday December 07, 2017 @06:09PM (#55698623)

    Journalists use language like that when they don't have any facts to back it up.
    The facts are Tesla no longer use the same sized batteries as other products, like laptops do, in their new models.

    I don't see how draining stockpiles of 18650 cells would help them manufacture their cars that require 2170 cells.
    A more likely story is that Panasonic has halted production of 18650 cells to manufacture 2170 cells instead, while keeping enough capacity to honor existing customer contracts.

    • The facts are Tesla no longer use the same sized batteries as other products, like laptops do, in their new models.

      I don't see how draining stockpiles of 18650 cells would help them manufacture their cars that require 2170 cells.
      A more likely story is that Panasonic has halted production of 18650 cells to manufacture 2170 cells instead, while keeping enough capacity to honor existing customer contracts.

      My understanding is that currently it is only the Tesla Model 3 that's using the larger 2170 cells. The M

      • Number of cells doesn't determine peak power output.
        It's the number of cells multiplied by the power output of each cell.
        Larger cells typically have a higher output power, as one of the determining factors is the surface area of the electrodes inside the cell. It's a balance between power density (watts a cell can deliver) and energy density (watt-hours a cell can store).

        2170 cells are allowing them to increase the energy density of the pack as a whole, which in theory allows them to increase the power dens

  • Look, I have news for you, there are about 20 decent battery technologies that are cutting edge right now. We had a battery technology research conference here this past summer at the UW. There are many flavors of battery types, and I'll be honest with you, they all work fairly well.

    A shortage of a specific type of battery materials in a specific country does NOT mean that you have shortages worldwide, nor does it mean that you can't use any of the other very good battery tech instead.

    Stop panicking. We nee

  • There is evidence that Apple is hogging the world's supply of overpriced bullshit.

    Seriously, when Apple ties up these exclusive contracts for its 4k displays, it's considered great business. If Elon is really hogging the world's supply of batteries, then one would expect to see the price of batteries to go up instead of down.

  • So, I'm reading all these Slashdot comments, and just am amazed at one thing that wasn't even close to true even ten years ago.

    Not only do Republicans appear to hate the environment, they clearly hate basic capitalism too.

    I would make a Russian communist joke starting with "Da comrade..." but given what's in the news, am worried it might be confused with a real critique.

    • So, I'm reading all these Slashdot comments, and just am amazed at one thing that wasn't even close to true even ten years ago.
      Not only do Republicans appear to hate the environment, they clearly hate basic capitalism too.

      Republicans have always, repeat always been against free market capitalism. They say they want small government, and for it to stay out of businesses' affairs, and then they pass assloads of laws designed specifically to give the advantage to one business or another. When they say they are against the Democrats interfering in the way businesses are operated, they mean that it's affecting their ability to do the same, not that they are opposed to it.

      • Lots of people don't seem to notice the difference between an economic and regulatory environment that is friendly to business in general and one that is friendly to certain specific businesses.

  • >but several other manufacturers have not been able to place orders for batteries, and won't be able to order more batteries until the middle of next year.

    Chinese factory owners must be happy

  • by Anonymous Coward

    Dec 3, 2017

    Yesterday was the monthly moment of truth for automakers in the US. They reported the number of new vehicles that their dealers delivered to their customers and that the automakers delivered directly to large fleet customers. These are unit sales, not dollar sales, and they’re religiously followed by the industry.

    Total sales in November rose 0.9% from a year ago to 1,393,010 new vehicles, according to Autodata, which tracks these sales as they’re reported by the automakers. Sales of c

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