It’s not just EVs though, Tesla is going to vertically integrate and parlay a lot of their EV tech into general energy solutions. The gigafactories and solar installations are the future imo, the cars are the side show.
Isn't Solar City just a trainwreck? From the acquisition which looked almost entirely like Elon bailing out his brother's business, to all manner of customer complaints now about fragile installations that are having maintenance and reliability issues and people being unable to get that dealt with because everyone involved keeps passing the buck...
On the balance sheet it doesn't look good, but if you think about the strategic impact it will have on the business once they can bring costs down and ramp up installations, I think it's more fair to call it an investment.
Yeah, if the future is for Tesla to integrate more storage solutions for the grid with renewables... There is logic in being bullish. Large-scale energy storage is probably one of the most critical sectors not solved of the green energy effort.
Tesla can't compete on energy storage on a $/kWh basis. CATL and BYD have them soundly beat. Yes it's not solved yet but Tesla is not the leader in solving it.
Elon has said many times lately they're trying to get all the batteries they can. They'll buy all the batteries Panasonic and others will sell them, and they'll make all the batteries they can in house.
Sure, so in that case they aren't trying to vertically integrate, unless they are currently scaling up production faster than anyone else and they're not.
> unless they are currently scaling up production faster than anyone else and they're not
They have Giga Nevada which is already the world's biggest battery plant (although technically a lot of the production is Panasonic.
They also make batteries at their China factory
They've also said they will make batteries at both Giga Berlin and Giga Texas, and they're increasing their operations in California, including making more batteries.
I think it's safe to say they are scaling up production extremely fast, and I'd be interested to hear of another company scaling faster than they are.
The vast majority of their cars sold in China use CATL batteries, Tesla batteries are limited to the high end models (for now).
CATL scaled much faster than Tesla - the company was founded in 2011, and they are now the leader in battery production with >30% of production. They are still increasing production. They managed to double their battery production from 10GWh/year to >20GWh between 2016 and 2018.
CATL is on track this year to produce around 140GWh of batteries, which will mean that their highest producing factory has to produce more than 35GWh. Tesla says they can produce 500k Model3/Y battery packs per year at Giga Nevada which at a generous 75kWh/pack means they may, in theory, match the smallest possible biggest factory from CATL. In reality what this means is that Giga Nevada is not the world's biggest battery plant - it's the world's biggest battery plant from plants which publish their precise production rates, but nonetheless at best #2.
They're production and supply constrained. They need to continue to outsource some of their battery production well into the foreseeable future even if they go full steam ahead on their own batteries.
It doesn't seem so to me - BYD is selling batteries much cheaper than Tesla can make them themselves. In this case it's not just supply, it's cost too.
Yes, because Tesla hasn’t even started putting their batteries in cars. They have yet to reach economies of scale on the battery production line, but when they do, it is expected to be cheaper.
