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Tesla is a Battery Company

blog.jeremyrwelch.com

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Re: Tesla is a Battery Company

#51

Post by shas3 »

happertiger wrote: post #11

If Tesla executes, they are going to be the leading company in a number of industries, of which battery technology and manufacturing is one of them. They are also leaders in direct sales, JIT manufacturing, motor design, any one of which is a disruptive innovation channel they could monetize, all in the service of building electric cars. Tesla is an energy company, a battery company, a car company, etc, just as GE or…

Usually, with exceptions, conglomerates (the dreaded c-word) are not desired by investors. There's even an estimated "conglomerate discount" for companies of this kind. With certain word-replacements, your comment can be applied for Hewlett Packard too, until the last part. GE, Berkshire Hathaway, General Dynamics, UTC, Honeywell, DuPont, 3M, etc. are exceptions to the rule, when it comes to the performance of conglomerates! One thing common to these companies is adaptability: they are constantly in churn and constantly seek changes in direction to focus on whatever products are profitable. For every successful conglomerate, there are dozens which failed or were broken up.

Given all this, it is too early to sing praises for Tesla! Musk is a great visionary, but creating the next GE also requires a lot of luck and happenstance.

[1] http://www.economist.com/news/business/21593412-conglomerate... [2] http://www.foxbusiness.com/markets/2011/01/19/dismantling-co...

Re: Tesla is a Battery Company

#52

Post by ctdonath »

themodelplumber wrote: post #27

Totally ignorant of the tech here, but could they now do Netflix for Batteries? $9 / mo. gets you all the AA, AAA, D cells you require?

It's all about the tech. Not disposable cells on the "one to a dozen" scale, but rechargeables by the cubic meter: wanna drive a car 300 miles? Tesla batteries. Wanna buffer your house power, daytime power demand at nighttime costs, or nighttime power use from solar? Tesla batteries. Anything you'd put gasoline in for high-power untethered use? Tesla batteries. Remember: the first Tesla car was powered by an enormous number of laptop batteries (basically AAs by the hundreds/thousands).

Current battery technology insufficient (your phone only lasts a day on a charge, or your electric car only gets 100 miles)? now that he's getting demand up for big-money big-volume batteries, Musk can fund battery research and production on a scale way beyond anything we've seen. Remember: Musk's "gigafactory" project is intended to build more batteries than the entire world currently produces.

Re: Tesla is a Battery Company

#53

Post by WallWextra »

pdonis wrote: post #31
thrownaway2424 wrote: post #23

I don't get this article. The battery in a Tesla Model S is literally a huge array of Panasonic flashlight batteries. It is an off-the-shelf catalog item you can order from Panasonic. Admittedly, you should probably have prior arrangements before ordering millions. The central insight of the Tesla founders was that people really will pay $85000 for an electric car. The other auto makers didn't believe that.

> The battery in a Tesla Model S is literally a huge array of Panasonic flashlight batteries. It is an off-the-shelf catalog item you can order from Panasonic. Um, no. Viewing the battery of a Tesla Model S as just a big flashlight battery misses the whole point of what Tesla is doing. A flashlight battery does one thing: it discharges energy until it's empty. Even an ordinary rechargeable household battery only does…

Charge balancing is a common feature, often built in to charge controller ICs. Of course Tesla has to do this on a much larger scale, like with all of its power electronics. But so does a Prius.

I'm not sure how much of a technological lead Tesla has versus major car companies already producing hybrids and electrics, but it can't be that huge, and those guys have way bigger R&D budgets.

Re: Tesla is a Battery Company

#54

Post by ferongr »

pdonis wrote: post #31
thrownaway2424 wrote: post #23

I don't get this article. The battery in a Tesla Model S is literally a huge array of Panasonic flashlight batteries. It is an off-the-shelf catalog item you can order from Panasonic. Admittedly, you should probably have prior arrangements before ordering millions. The central insight of the Tesla founders was that people really will pay $85000 for an electric car. The other auto makers didn't believe that.

> The battery in a Tesla Model S is literally a huge array of Panasonic flashlight batteries. It is an off-the-shelf catalog item you can order from Panasonic. Um, no. Viewing the battery of a Tesla Model S as just a big flashlight battery misses the whole point of what Tesla is doing. A flashlight battery does one thing: it discharges energy until it's empty. Even an ordinary rechargeable household battery only does…

The cells themselves are COTS Panasonic NCR18650A without built-in protection circuits.. The management circuits are probably developed by Tesla but are external to the batteries, most likely a circuit per array of parallel cells.

Having a protection circuit per cell would be wasteful and also result in quite a bit of power loss and complexity in wiring them up.

Re: Tesla is a Battery Company

#55

Post by NamTaf »

darkmighty wrote: post #42
happertiger wrote: post #11

If Tesla executes, they are going to be the leading company in a number of industries, of which battery technology and manufacturing is one of them. They are also leaders in direct sales, JIT manufacturing, motor design, any one of which is a disruptive innovation channel they could monetize, all in the service of building electric cars. Tesla is an energy company, a battery company, a car company, etc, just as GE or…

I have a little trouble seeing all the businesses you see, which unsubstantiates your point a bit for me. For example, being a leader in direct sales is great for their goal of spreadings EVs. But how is this applicable anywhere else outside the car industry? Does apple 'monetize' direct sales as a 'channel'? Does apple 'monetize' JIT manufacturing as a 'channel'? To me they just use it as a tool to better position t…

> Does apple 'monetize' direct sales as a 'channel'? Does apple 'monetize' JIT manufacturing as a 'channel'?

Yes, keeping their stock pool as low as it does has real financial benefits associated with it. Cook's entire empire at Apple was built on the back of his prowess at streamlining this, such is the value of it to the business. In that sense, they certainly did monetise their skills in JIT manufacture.

I'd argue they also did monetise the direct sales aspect, since the whole 'Apple Store' experience is presumably of net financial gain to them, or else they wouldn't do it.

Re: Tesla is a Battery Company

#56

Post by zeeshanm »

Selling batteries def have helped them with keeping the lights on. Not sure if many remember but Tesla was about to go under water at some point before cutting a deal with this German car company to sell them batteries.

Re: Tesla is a Battery Company

#58

Post by coryl »

jkestner wrote: post #49

Don't ignore the other battery companies. http://www.pcworld.com/article/2900452/foxconn-partners-with... Foxconn hopes to build cars priced under US$15,000, according to Gou. The contract manufacturer already develops electric car batteries, which he said were in demand. Look out, Tesla. Being that the batteries are the expensive part of an electric car, Foxconn could get to the mass market before Tesla, and possibl…

Does Foxconn have much expertise in manufacturing batteries?

Re: Tesla is a Battery Company

#59

Post by faitswulff »

DenisM wrote: post #18

Musk has previously said in an interview that Li-Ion batteries were at $600 / kwh, but when he looked at the component and manufacturing costs they were at $100 / kwh. Somehow the entire supply chain has piked up a lot of overhead, and he realized it would be possible to reduce that. At those prices, Model-S battery pack costs are between $36k and $51k! When I realized that, I came to conclusion that Tesla Motors cou…

I'm sorry, but what is a Gigafactory?

Re: Tesla is a Battery Company

#60

Post by chatmasta »

shas3 wrote: post #51
happertiger wrote: post #11

If Tesla executes, they are going to be the leading company in a number of industries, of which battery technology and manufacturing is one of them. They are also leaders in direct sales, JIT manufacturing, motor design, any one of which is a disruptive innovation channel they could monetize, all in the service of building electric cars. Tesla is an energy company, a battery company, a car company, etc, just as GE or…

Usually, with exceptions, conglomerates (the dreaded c-word) are not desired by investors. There's even an estimated "conglomerate discount" for companies of this kind. With certain word-replacements, your comment can be applied for Hewlett Packard too, until the last part. GE, Berkshire Hathaway, General Dynamics, UTC, Honeywell, DuPont, 3M, etc. are exceptions to the rule, when it comes to the performance of conglo…

Those conglomerates developed before the age of computers. They designed their operational structures without the convenience of modern technology, and therefore relied on expanding work forces to grow their company. Labor was cheap, and necessary for growth at the time because humans had to do so much more than they do now.

Facebook is a multinational company with only a few thousand fulltime employees. If GE or Microsoft developed in the same technological context as facebook, they would likely employ far fewer people than they do now. The market increasingly favors agility, and monolithic business models are becoming obsolete (if they are not also decentralized in some capacity, a la Uber).

Tesla can become a powerful multinational player while remaining agile.

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