Tesla Motors, Panasonic J-V for Gigafactory - Simon Moores Research Note
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Post on 10-Aug-2014
DESCRIPTIONA Research note on the partnership between Tesla Motors and Panasonic to build the world's largest lithium-ion battery plant in the US. Looks at the position of each company and the raw materials required (graphite, lithium,cobalt).
Research note Tesla Motors / Panasonic / the Gigafactory Thursday, 31 July 2014 Simon Moores, Independent Consultant Critical Minerals & Metals Intelligence Email: email@example.com Twitter: www.twitter.com/sdmoores Linked In: click here This research note has no affiliation with the companies discussed and is to provide independent analysis on the companies and industries mentioned. The author/authors hold no financial interests or shares in any companies mentioned. Simon Moores, Independent Consultant Critical Minerals & Metals Intelligence Email: firstname.lastname@example.org Twitter: www.twitter.com/sdmoores Linked In: click here Story: Panasonic commits to Tesla Motors super-battery plant, the Gigafactory Based: USA Business: Car manufacturing Worlds highest profile electric vehicle producer Based: Japan Business: Electronics manufacturing One of the largest portable battery manufacturers in the world Batteries Email: email@example.com Twitter: www.twitter.com/sdmoores Linked In: click here Story: Panasonic commits to Tesla Motors super-battery plant, the Gigafactory Gigafactory represents a fundamental change in the way large scale battery production can be realized. Not only does the Gigafactory enable capacity needed for the Model 3 but it sets the path for a dramatic reduction in the cost of energy storage across a broad range of applications. JB Straubel, CTO & Co-founder of Tesla Motors, 31 July 2014 I believe that once we are able to manufacture lithium-ion battery cells at the Gigafactory, we will be able to accelerate the expansion of the electric vehicle market." Yoshihiko Yamada, Executive Vice President of Panasonic, 31 July 2014 Email: firstname.lastname@example.org Twitter: www.twitter.com/sdmoores Linked In: click here Tesla Motors strategy brief: Tesla Motors Inc is the highest profile EV designer and manufacturer today. Through its EV assembling plant in Fremont, California, the company produces its latest generation vehicle, the Model S and soon the Model X. As of December 2013 Tesla sold 25,000 units of the Model S, but is on track to sell 35,000 in 2014. The car retails for $70-90,000. Tesla is hoping this momentum will carry through to its first true mass market car, the Model 3 which will use batteries produced by the Gigafactory, a huge project to build the worlds largest battery plant in the USA. Tesla plans to produce 500,000 EV batteries a year by 2020. The Gigafactory will double the worlds 2013 capacity of lithium-ion batteries when launched in 2017 in a bid to bring down the cost of batteries by over 30%. Tesla has enlisted the help of its long term supplier Panasonic to achieve this goal. Today it was revealed Panasonic are on board with the Gigafactory. Tesla and Panasonic will need huge volumes of critical raw materials (graphite, lithium, cobalt) for the battery plant. The road to securing these raw materials starts now. Plans to reduce EV battery costs by > 35% through $6bn Gigafactory Sees EV producer turn into battery manufacturer Beginning drive to secure raw materials for Gigafactory Panasonic: Japan electronics giant needs foothold in EV battery market Officially confirms it will build Teslas Gigafactory battery cells Panasonic Corp, one of the worlds largest electronics and battery manufacturers, has confirmed today it will officially partner Tesla Motors for the Gigafactory. Panasonic will fund and build the battery cells for the 500,000 unit battery plant, including installation of the equipment and bringing the expertise required. Tesla will effectively project manage the Gigafactory providing the land, utilities, and buildings. The Gigafactory will give Panasonic a firm foothold into the EV battery market, an area it has lost ground in the last five years to rivals LG Chem, Johnson Controls Inc, and Automotive Energy Supply Corp. (a Nissan / NEC j-v). The project will also be a significant boost for high value, 21st Century manufacturing in the US and a much needed step forward from steel and car manufacturing the country has become known for. There is a feeling that the US missed its opportunity to be a serious player in the new battery age as it was too focused on existing markets in the late 1990s to mid-2000s. The Gigafactory gives the country a golden second chance. While Japanese knowhow will be driving the project that will employ 6,500 people, it is American invention and creativity that is hoping to break down the mass market barrier for EVs. The Gigafactory| In numbers Image: Simon Moores Launch: 2017, Capacity 2020 Capacity: 500,000 EV batteries / 35GWh of cells / 50GWh of packs per year Cost: $5bn Employees: 6,500 Plant size: 10 million cubic feet Location: south-west USA, exact location undecided, Nevada (Reno) expected to be favourite Major raw materials: graphite, lithium and cobalt Email: email@example.com Twitter: www.twitter.com/sdmoores Linked In: click here Raw material impact: What Tesla and Panasonic are planning with the Gigafactory could have a huge impact on the demand for battery raw materials. A Gigafactory at capacity in 2020 will effectively double the number of batteries the world produced in 2013. The impact on raw materials critical to battery technology with undoubtedly be game-changing should the mammoth project reach its goal. The volumes are outlined following this slides, but graphite (anode) will be the most in-demand raw material for Tesla and Panasonic as the number one input mineral into a lithium-ion battery by volume. Lithium will be the second most in demand product and significant amounts of cobalt also be required (cathode). These raw materials are not commodities but engineered products to strict specifications. Producing a usable product in a battery is not as simple as digging it out of the ground and using the mineral such is the case with commodities. They require further processing, engineering and testing with the battery manufacturers to gain entry level standards. Battery raw material availability will therefore be a major issue facing the Gigafactory. Batteries required a number of specially engineered raw materials Graphite, lithium and cobalt of highest importance Demand impact at capacity will be huge Graphite 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 Battery-grade graphite demand in 2013 (natural, in tonnes) World Gigafactory (conservative) Gigafactory (bullish) Source: Simon Moores Email: firstname.lastname@example.org Twitter: www.twitter.com/sdmoores Linked In: click here Lithium 0 10,000 20,000 30,000 40,000 50,000 60,000 Battery-grade lithium demand in 2013 (in tonnes) World Gigafactory (conservative) Gigafactory (bullish) Source: Simon Moores Email: email@example.com Twitter: www.twitter.com/sdmoores Linked In: click here Cobalt 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 Battery-grade cobalt demand in 2013 (in tonnes) World Gigafactory (conservative) Gigafactory (bullish) Source: Simon Moores Email: firstname.lastname@example.org Twitter: www.twitter.com/sdmoores Linked In: click here Total critical mineral demand for Gigafactory 0 20 40 60 80 100 120 140 160 Increase in battery-grade demand from Gigafactory* on 2013 levels (%) Graphite Lithium Cobalt Source: Simon Moores * Gigafactory at capacity at 2013 utilisation rates Gigafactory risks: Should Tesla and Panasonic reach its goal of cutting battery costs by over 30%, both companies will need to begin as far upstream as the raw material. Minerals such as graphite, lithium and cobalt, in addition to copper and aluminium, will be the biggest input costs into the Gigafactorys batteries. Telsa will need to reduce the number of links in the supply chain from the mine to the market in order to reach its cost reduction goal. Tesla also has to battle a profile issue. It has positioned itself as a game-changing, environmentally responsible company. Should the raw materials it sources be produced in an environmentally damaging way, it would undermined what the company is trying to achieve and negatively impact its public profile and with its share price. The company has already experienced a negative reaction from a Bloomberg story reporting on graphite being produced in China. Therefore responsibly sourcing raw materials is of paramount importance to Tesla. It has already announced its intention to only source from North America, but this is widely expected to be expanded to a global search for minerals and metals produced to western standards. Controlling raw material supply key to cutting battery costs Supply security could be a major issue Sourcing environmentally responsible raw materials also challenge Email: email@example.com Twitter: www.twitter.com/sdmoores Linked In: click here Profile Independent consultant specialising in niche, critical and industrial minerals and metals Graphite, lithium, vanadium, cobalt, fluorspar, mineral sands Tracking supply, demand and prices in the industry since 2006 when he joined Industrial Minerals Visited numerous mines incl: SQM (Lithium in Chile), Black Dragon Graphite (Graphite, China), American Vanadium (Vanadium, USA), Western Lithium (Lithium, USA), Rockwood Lithium (Lithium, USA), Ashapura (Bauxite, Kaolin, Bentonite, India), Tata Chemicals (Soda Ash, India & UK) Interviewed by international press incl: The New York Times with regards to rare-earths after he broke the story that China blocked exports to Japan in 2009, Londons The Times, The Australian, Reuters, Bloomberg, Italys La Stampa Email: firstname.lastname@example.org Twitter: www.twitter.com/sdmoores Linked In: uk.linkedin.com/pub/simon- moores/18/614/b06/ Speaking Sydney, Australia, 8-9 September 2014 > Graphite Investment Seminar Organised by Email: email@example.com Twitter: www.twitter.com/sdmoores Linked In: uk.linkedin.com/pub/simon- moores/18/614/b06/ Shenzhen, China, 8-9 December 2014 > Global Resources Investment Conference > Graphite Investment Summit Organised by: www.GRIConference.com Sponsors: PwC, TMX, CWN Capital, Bennett Jones
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