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Should Tesla Make Batteries Instead of Electric Cars? 362

cartechboy writes: "Tesla seems to be doing quite well these days, but one bond trader thinks the company should quit making electric cars and focus efforts on making batteries instead. Bond manager Jeffrey Gundlach says he's already tried to meet with Elon Musk to persuade him to take the battery-only route. Speaking to Bloomberg, he said Tesla could be 'wildly transformational' in the same way electricity and electromagnets were at the advent of their discovery. Enough people are interested in Tesla's vehicles that Musk probably won't take Gundlach's advice. Should he?"
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Should Tesla Make Batteries Instead of Electric Cars?

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  • Make batteries? (Score:5, Informative)

    by jonnythan ( 79727 ) on Friday May 16, 2014 @03:52PM (#47020519)

    I was under the impression that Tesla vehicles used banks of off-the-shelf 18650 Li-ion batteries. Panasonic is their current supplier if I recall. Even their proposed battery plant in the southwest is really a place for Panasonic to manufacture batteries for Tesla. Yes, they package them well and I'm sure they have some great controls and associated hardware and software, but is there really something groundbreaking about their batteries specifically? They already make a powertrain for Toyota - a move that hasn't produced a fraction of the buzz and money as their own vehicles. Not sure I understand this suggestion.

  • by profplump ( 309017 ) <zach-slashjunk@kotlarek.com> on Friday May 16, 2014 @04:03PM (#47020649)

    Tesla doesn't produce the consumable fuel (electricity), just the durable storage device. And while car manufacturers certainly might outsource a fuel tank, no one would consider it unusual for them to make their own either.

  • by profplump ( 309017 ) <zach-slashjunk@kotlarek.com> on Friday May 16, 2014 @04:05PM (#47020657)

    If they make good batteries and sell them at a reasonable price, other will buy them. Take a look at say, projector LCD panels -- Epson makes essentially all of them, but you can buy projectors with a wide variety of designs from a number of manufacturers. And that's hardly the only example.

  • by hsmith ( 818216 ) on Friday May 16, 2014 @04:12PM (#47020739)
    Or he could just do both, build cars and sell batteries. Plenty of car manufactures sell tech and parts to other car manufactures. So many car parts are outsourced in a vehicle it is absurd.

    He is doing all right pushing his cars so far and advancing his tech, why stop doing something that is working?
  • by lagomorpha2 ( 1376475 ) on Friday May 16, 2014 @04:18PM (#47020801)

    It helped that initially Lotus made most of the car. Lotus has been making cars for some time.

  • Re:Make batteries? (Score:2, Informative)

    by Anonymous Coward on Friday May 16, 2014 @04:22PM (#47020843)

    Um... they have, and they are the 18650's.

    Tesla went this route so as to not be locked into a specific or custom battery form factor.

  • by Yebyen ( 59663 ) on Friday May 16, 2014 @04:29PM (#47020925) Homepage

    I know that Wikipedia is of course the one and only best primary source, but here goes anyway:

    "Tesla produced the Roadster until January 2012, when its supply of Lotus Elise gliders ran out, as its contract with Lotus Cars for 2,500 gliders expired at the end of 2011."

    So, if you're trying to say that Lotus never made parts for the Model S, fine. You're the first person to use the designation "Model S" anywhere in this thread. Tesla made other cars, before the Model S.

    http://en.wikipedia.org/wiki/T... [wikipedia.org]

  • by rjstanford ( 69735 ) on Friday May 16, 2014 @04:48PM (#47021131) Homepage Journal

    Interestingly Musk recently said that in retrospect that's one of the things that he'd do differently; they ended up changing so much of the chassis that they didn't really get a lot of benefit from it, but used enough of it that they were still bound to it.

  • The funny thing is that Telsa was originally founded on the idea they would purchase drop-in replacement power trains from AC Propulsion and put them into Lotus bodies as an integrator. That was their original goal, but it didn't quite work out the way they intended and it turned out they needed to get their hands dirty on a whole bunch of other manufacturing just to get even that to work out.

    One thing I admire about Elon Musk is that he is able to see some inefficiencies in his companies and root out a way to make them much more efficient. That is definitely how Tesla has been able to turn a profit from a company that simply should have gone bankrupt a couple of times in the past. His way of rooting out inefficiencies is usually by not cutting corners with employees or feeding them shit in a mushroom management system, but rather by looking for components that are costing far too much compared to the raw materials price and taking over the manufacturing of those components in a vertical integration of manufacturing. Every one of his companies that he is currently running is now making much more stuff in-house than was the case even a year ago.

    Mr. Musk once started to complain about the cost of raw Aluminum and IMHO Alcoa ought to be concerned he might just start a Bauxite mining & processing operation.

Variables don't; constants aren't.