Tesla Gigafactory 1, which produce battery packs and battery cells in partnership with Panasonic, is quickly becoming the automaker’s most important asset as it has now already produced over half a billion battery cells.
Securing battery cell supply at good prices is arguably the most important part of ramping up electric vehicle production for automakers.
Most of them have the same approach to issue large contracts to battery manufacturers and only some of them participate in cell design.
Tesla has taken a unique approach by not only participating in the cell design, but it also got involved in the entire battery cell supply chain by partnering with Panasonic and actually owning the manufacturing facility, which became Tesla Gigafactory 1.
The two companies have spent billions on the project and it could already be considered a success as it has become the largest battery cell manufacturing factory in world history with an annualized output of over 20 GWh.
Based on our back of napkin calculations, Tesla and Panasonic have already produced over 600 million individual battery cells – representing close to 11 GWh of energy capacity.
Those battery cells are only for Model 3 currently. Tesla Gigafactory 1 is also producing 2170 cells for Tesla’s stationary energy products, but the company has also used imported cells for those products, which makes it hard to determine the battery cell contribution from Gigafactory 1.
— Electric_Hajek (@Stefan_Hajek) January 10, 2019
The capacity is expected to soon increase to 35 GWh with a new production line from Panasonic.
The Japanese electronic giant is also in talks with Tesla to increase its investment at Gigafactory 1 beyond the 35 GWh capacity.
Gigafactory 1’s battery cell production volume is enabling Tesla to produce long-range electric vehicles at a higher rate than any other automaker in the world.
But the company is also believed to have a cost advantage when it comes to battery cells.
According to a recent report, Tesla’s Gigafactory 1 battery cells have a 20% cost advantage over LG Chem, which is seen as the leader in EV battery cell by many.
They claim that Tesla’s battery cell cost is at $111 per kWh and LG Chem is at $148 per kWh.
Tesla recently said that it aims to be at $100 per kWh by the end of last year. The new cost level would enable the production of the standard Model 3 battery pack next year.
Furthermore, Tesla’s President of Automotive, Jerome Guillen, recently said that the company is working on new and improved battery cell design.