Tesla shifts battery pack assembly from Thailand to the U.S.
The Wall Street Journal recently ran a report on how the decline in the value of the U.S. dollar against almost all other currencies is prompting car makers to take a new look at exporting vehicles built here. Almost as an aside deep within the article it was mentioned that Tesla has decided to shift production of their battery packs from a factory in Thailand to their home base in San Carlos California. According to Tesla VP Darryl Siry, the exchange rate wasn't the primary reason for the change. The logistics of shipping 1,000lb battery packs halfway around the world were the primary concern. The energy storage system represents a significant portion of the cost of the car and having that sit on a boat from half way around the world just didn't make sense.
The 6,831 lithium ion cells in each pack are sourced from suppliers in Taiwan and will now be shipped directly to the U.S. where the packs are being assembled. Cars for U.S. delivery are being shipped from England sans energy storage system which gets installed when the cars land here. Once the cars arrive in the U.S., the battery is installed. Similarly, when European deliveries begin next year, the packs will be installed locally prior to delivery. With the current slow assembly rate, the packs are being assembled at the San Carlos headquarters. As production ramps up, they will likely move that process to a larger facility.
[Source: Wall Street Journal, Tesla Motors]
Reader Comments (Page 1 of 1)
Dave 1:18PM (4/11/2008)
Tesla didn't think about the time lag when they first outsourced to Thailand? Really?
Reply
Wildgoosechase73 2:51PM (4/11/2008)
The ironic thing is that new manufacturers and foriegn builders will build cars in the US but US automakers are shifting more production outside the US because of the UAW.
Reply
Tom 3:05PM (4/11/2008)
Dave:
I think they discovered that the cost of assembled battery packs from Thailand started to show their hidden costs.
1) Shipping cases or pallets of individual batteries allows you to configure them for lowest cost transport. Contrast with a battery pack that is 1/2 ton each and designed for best fit in a car (not the cheapest shipping container).
2) Low cost labor countries look great unless fuel and shipping costs spike. Guess what happened?
3) Since Tesla uses a standard cylindrical 18650 battery, they are probably making 2 wire or strap connections to each battery. That is over 13,662 connections. The statistical likelihood of making a pack with a bad connection is very high until their manufacturing is fully wrung out and stabilized. Doing that from around the world is more than just tough.
I would bring it all across the street from R&D, too. In the end, the price is the same, speed of improvement is faster and potential for success is greatly enhanced.
Reply
Katie Fehrenbacher 3:20PM (4/11/2008)
Tesla is not only shifting its battery pack assembly from Thailand to the U.S., but also wants to one day buy its batteries (which are currently made in Japan) from manufacturers in the U.S. Having US manufacturers could bring the cost down even more. We wrote about it here on earth2tech.com:
http://earth2tech.com/2008/02/06/teslas-batteries-to-be-made-in-the-usa/
Reply
Doug 3:22PM (4/11/2008)
By the same logic, the packs should also be assembled in Europe for European delivery instead of spending time on a boat crossing the Atlantic. Any further word on what the plan is for those cars?
Reply
steven 3:34PM (4/11/2008)
I can see the headlines now...
BREAKING NEWS: Tesla "officially announces" new reason for the latest delay in delivery of any production vehicles to real customers.
Reply
jake 6:01PM (4/11/2008)
@Doug
Siry mentioned a little bit about sheet assembly possibly being done in UK or Europe for the euro cars for the same shipping reasons. "For the same reasons, we will look to replicate our sheet assembly in the UK or Europe somewhere to do finishing for euro-spec cars. Replicating the assembly facility is not hard to do."
@steven
Siry mentions that this switch had been done a long time ago, so there will be no additional delays for this switch.
"The switch of ESS manufacturing to the US from Thailand has been completed for some time and all sheets coming off the line for production are assembled in San Carlos. So there is no delay to the program to make this switch."
Link:
http://www.teslamotorsclub.com/news-articles-events/1077-exporting-including-tesla-battery-news.html
Reply
Kevin Nugent 8:41PM (4/11/2008)
Oh so now they want to help support the us economy because of their hidden cost . Good for them i am happy that they atleast felt some pain from making arrogant decision
Reply
tankd0g 9:21PM (4/11/2008)
First green move Tesla has made to date.
Reply
texmln 11:25PM (4/11/2008)
steven is the only one who gets it...
Reply
Monroney 7:00AM (4/14/2008)
This is just a minor blip in the cost over runs this company has gone through. There still is the issue of the transmission. The initially spec'd 2 speed transmission has been jettisoned for a one speed that is going to be replaced with a one speed. But, the first batch of cars will end up having those transmissions replaced with sturdier one. What will that cost the companies investors?
One thing for sure, Tesla is realizing that trying to sell a car is a whole lot more difficult than building a car. It will be interesting to see how they do when all the devotees get their cars and the company has to try and "sell" their product to other people. Hopefully they can successfully make that leap.
Reply
Bruce Billings 1:06AM (5/31/2008)
Sirs: Have been monitoring Tesla for some time wonder why they avoid Altairnano in Reno NV. Thair Lion Batt. looks better and could charge faster. Don't know the cost, but note not one word of them in all the articals. Are they aware there might be a better Batt.????
could be that EEstor of TX. might help also.??
Reply
Chris M 4:07AM (5/31/2008)
Bruce Billings: There are several reasons why Tesla Motors is not using the Altairnano battery.
1. The Altairnano battery was not available when they started the project. They went with what was available, not something that might be available at some unknown future time. Altairnano still isn't in full production, but Tesla Motors is.
2. Altairnano batteries have an energy density of only 80 wh per Kg, while the battery pack Tesla developed clocks in at 130 wh per Kg - and that includes all the thermal management and safety equipment weight! An Altairnano battery of the same 53 Kwh storage capacity would add nearly 600 pounds, reducing performance, reducing range, and taking up more space.
3. Altairnano batteries cost far more per Kwh than the mass produced standard commodity batteries Tesla is using. Using Altairnano would have nearly doubled the price of the car.
EEStor is even worse, they haven't even shown any working prototypes, and it is an open question when, or even if, they will ever go into production. Moreover, even their most optomistic guesstimates put their energy storage at 60 wh per Kg, below Altairnano, and less than half what Tesla Motors has already achieved.
Reply