Tesla gigafactory: ‘part of bigger race’

During an interview by BBC Television World News, Dr Peter Harrop, chairman of analysts IDTechEx, suggested the Tesla gigafactory was ‘part of a bigger race’ to supply battery power.

In the interview, Dr Peter Harrop focused on the opening of the Tesla battery gigafactory billed as ‘the world’s largest factory building’. Media reports had suggested it gave Tesla global battery dominance and even lead to 10 times global battery output but the interview quashed these rumours and highlighted how it was part of a huge ramp up in lithium–ion production ‘where the East Asians are in the driving seat’.

Dr Peter Harrop explained, ‘The Tesla cells are by Panasonic of Japan which has invested $1.6 billion in the project in addition to expanding its own facilities.

‘Tesla is copying $13 billion BYD in China in making a range of electric vehicles, batteries and solar cells but BYD has its own battery cell technology. BYD is likely to have similar battery production capacity to Tesla in 2020.

‘Tesla intends to leapfrog. For example, while BYD is taking $1 billion orders for pure electric buses, Tesla is preparing its first, radically different bus for sale. However, when it comes to batteries, BYD satisfies its own demand and tries to get competitors in vehicle manufacture to buy their batteries from it – tough to do. In contrast, we believe Tesla has limited interest in providing more than its own battery needs.’

IDTechEx points to the main thing stopping most consumers buying pure electric vehicles is range but to triple the range of affordable electric vehicles calls for more than simply economies of scale provided by gigafactories.

‘Dr Harrop continued, ‘LGChem of Korea seems headed for 50GW production capacity by 2020, which is probably more than anyone else in the race for economy of scale. However, the key production of those clever new active materials lies mainly in Belgium, Japan and Korea though some key patents are owned by US organisations.

‘The Tesla Gigafactory is part of this bigger race to supply very different, large lithium-ion battery packs with their management electronics for everything from ships, buses and trucks to solar powered houses. However, there is even a possibility of shortages of large lithium-ion battery packs as the Titans prepare for battle.’