Tesla might be serious about producing its own batteries

A few months before this meeting, Tesla had acquired California-based supercapacitor maker Maxwell for $288 million, which will help bolster its efforts toward developing battery technology in house. In October, Tesla acquired Canadian battery manufacturer Hibar Systems, further reinforcing its bid to manufacture its own batteries. 

A recent report from Electrek said Tesla is building a battery cell pilot production line in its Fremont, California, plant. New job listings have come up in Tesla’s employment portal highlighting responsibilities that include the need to “drive design, commissioning ramp-up of a complex manufacturing tool that is the first of its kind at Tesla” to manufacture battery cells. 

For Tesla, arguably the biggest proponent of electric cars in the world, dependence on Panasonic for its battery needs was a chink in its armor that it has longed to rectify. Tesla’s relationship with Panasonic continued to strain over the years as the Japanese technology company with its austere business practices could not adapt to the brash business decisions that Musk was infamous for. 

Musk had vented about the apparent disconnect during one of the investor meetings in January 2019, mentioning that Tesla was “cell-starved for vehicle production.” Panasonic, operating production lines in Tesla’s Nevada Gigafactory, could not supply batteries at the rate that Musk expected them to, slowing down vehicle production output. 

Although Musk has maintained that the relationship with Panasonic had not broken down, Tesla’s ambitious acquisitions did paint a different picture. That said, Tesla did attempt to develop its own batteries several years before the launch of Model S but ended up discarding the project as it proved too expensive. 

However, with renewed vigor and the newly made acquisitions under its belt, Tesla might finally have the resources to succeed in closing the loop on its vehicle production. Success at the pilot battery production line at Fremont would inevitably lead Tesla to announce its transition from being an assembler of electric batteries to producing them en masse on its own. Apart from increasing control over its vehicle production, it also would lead to a decrease in unit costs — possibly reducing on-road prices of Tesla vehicles.