With battery partner Toyota already $50m deep in Tesla’s equity (and another $60m deep in an electric RAV4 development agreement), Automotive News [sub] reports the Japanese automaker’s main EV partner, Panasonic, is investing $30m of its own in the Silicon Valley EV form. Panasonic and Toyota jointly build NiMh and Li-ion batteries in a venture called Primearth, and the move appears to bring Tesla closer into Toyota’s orbit. Tesla already uses Panasonic cells in its drivetrains (although not exclusively), and the two firms have already partnered on power-pack development. Panasonic’s $30m investment is said to have bought it a two percent stake in Tesla, and the two will cooperate together on sales and marketing of those battery packs in the future.
Though many have hailed Toyota’s investment in Tesla as a far-sighted investment in the EV technology Toyota has largely shied away from developing itself, the move towards Tesla may be more of a strategic hedge than a blue-sky gamble on future technology. Volkswagen, which is trying to unseat Toyota as the largest automaker in the world, has started researching its own battery concepts in its Silicon Valley labs, and they bear a remarkable resemblance to Tesla’s arrays of 18650 Lithium-ion cells. And well they should: VW’s California EV research is being assisted by Martin Eberhard, who helped found Tesla. Tesla’s power pack concept of arraying thousands of the AA-sized 18650 cells hasn’t been widely proven outside the firm’s own Tesla Roadster, but Volkswagen’s interest in the concept has clearly caught Toyota’s attention. With Panasonic coming on board, it seems Toyota is working hard to bring Tesla into its corporate family.
The Tesla Roadster purportedly bought their first-gen lithium-ion batteries from Sanyo, Sanyo has since been gobbled up by Panasonic, it doesn’t seem to off that Panasonic will now invest in Tesla- chump change considering the strength of the yen. Panasonic is signed to supply Tesla with their next-gen Lithium-nickel batteries, which are much safer and better then the Lithium-cobalts in the Roadster. However, I’m guessing that the Daimler-Evonik Industries batteries are a dead-end deal as far as Tesla is concerned.
Tesla, surprisingly, seems to be pulling all of this off. Let me eat my hat, they actually may prove to be a good investment.
A good investment? Not with my money. I do like the name on the battery, though. It reminds me how revolutionary the electric car is supposed to be. Too bad the ad-hacks at GM didn’t think of merging their electrically revolutionary idea into the car’s name: the Chevy Revolta. That would make it a sure winner in the daily double.
Let me eat my hat, they actually may prove to be a good investment.
Not so fast. By the end of 2011, Tesla will not have a single product. Lotus will no longer make any Roadsters for Tesla. And the Tesla Model S will not be ready until who knows when.
The rush to invest in Tesla reminds me of when the same thing happened with carmakers and Ballard, with its fuel cells. Everyone was investing money and talking it up. The Ballard stock price got a nice big bubble. But it didn’t last.
Tesla has a chance of making money. In the far future. When it has a product. And assuming it can beat its competition, who will be much bigger, stronger, and more experienced than Tesla.
But the chance is small. Mighty small. Pretty near zero. You can count on that.
Tesla has bought enough of the bodies from Lotus to meet their projected demand until the Model S and the eventual Roadster Plus make it to market. Of course, in the likely event that their projections are over or under they’ll have problems.
They definitely have a troubled period ahead of them.. it’ll be interesting to see if they pull through.
Martin Eberhard needs to be careful. He’s one of the inventors on the Tesla battery pack patent applications. Ridiculous though they are.
Step 1 – Take money and pile in driveway.
Step 2- Apply lighter fluid and lighted match.
Step 3 – Profit!
Only the most r-tarded of r-tards thinks Tesla will EVER (EVER) make money.
No current product that makes money. No future product in the pipeline that could possibly survive in a competitive environment. No technical or strategic advantage. Why is this a good investment for the taxpayer (or anyone else)?
Really simple. If you can’t make money after 5 years of being pathetically well-capitalized, you don’t have a viable product AND your management sucks.
Yeah, I know. GM will never go BK either. Nor, post-BK will they be sold to the Chinese for pennies on the dollar. Yeah, I’m crazy.
The Roadster is profitable for Tesla — at least, counting carbon credits. Probably profitable after, but nowhere near the volume they need to survive.
It seems a little early to call “no future product in the pipeline that could possibly survive in a competitive environment”. There are no pure BEVs on the market with significantly more range than 100 miles. Forthcoming EVs from Audi (e-tron) and MB (SLS) have disappointingly short ranges, though those specifications are likely in significant flux.
The Tesla Roadster lithium pack (120 wh/kg) is substantially higher specific energy than the liquid-heated/cooled Volt (90 wh/kg) or the air-cooled Leaf (80 wh/kg). Tesla claims to have batteries for the Model S that are 50% higher density. Density is critical for range and power, areas that most EVs fall short in.
Plus, Tesla has a significant advantage in actually SHIPPING product. Nissan Leaf is coming out soon, and in significantly higher volume.. so maybe the first mover advantage will fall away in time. But for now, noone else has the experience Tesla has. Toyota has all the experience earned from the first NiMH RAV4 EV program, and they still turned to Tesla to develop new RAV4 EVs.
None of this makes Tesla stock a good buy, or highly likely to succeed — but I find it slightly incredulous to claim that Tesla or the Model S has no competitive advantage.
Amazon didn’t turn a profit for seven years. Will Tesla follow the typical EV manufacturer trajectory of funding -> bombast -> fail to ship -> more funding -> more bombast -> bankruptcy, or Amazon’s? We’ll see.
Good comments, protomech. But Tesla does not have experience building an electric car. Lotus does. Lotus built the car. Tesla had others build the motors and the batteries. (Both are largely off-the-shelf, standard designs.) Tesla has almost no technology of its own.
Remember the business plan that Tesla had? Their big idea had nothing to do with technology. It was instead to start at the top of the market, with an expensive niche car, and then use the profits and experience from that to work down to a more mainstream, mass-market car.
You can still see the vestiges of that business plan in the Model S. But it’s pretty hard to say that they have been at all successful to date. Let alone in the future.
Tesla follows the pattern of Elon Musk’s style of entrepreneurship. He did it at Zip2, at Paypal, and now at Tesla. That is, forget about anybody else. It’s all about me. He’s a parasite on society, not a contributor to it.
Protomech,
Please link a P&L for Tesla that shows a net profit. Add it all up and they burn cash like the Treasury incinerating worn-out notes.
They were in the hole since day one, and remain there to this very second.
Daanii2 has done the basic analysis – mostly shelf-tech, and no knowledge whatsoever of how to construct the car to stick the Tesla drive train into.
Hopes and dreams for Unicornfart cars are warm, fuzzy, and adorable, but a bit short on deliverables. The Volt will never sell in volume, nor be a profit center by virtue of its complete lack of market competitiveness vis-a-vis what is already known to be out there.
Were future Teslas somehow to miraculously deliver on stated goals, they still would be less market-worthy than a Volt. Ergo, any Tesla will fail.
I’ve seen more Lamborghini Jalpas/Muiras/Silhouettes/Countaches on the road than Teslas.
@Daanii2:
Lotus assembles the chassis, dash, body panels, and interior based on Tesla’s designs. Tesla installs the borg-warner gearbox, and assembles and installs the battery pack, motor, and controller .. in short, they design, assemble and install virtually all the parts of the car that make it an electric car.
The chassis and motor are modified designs based on work by Lotus and AC Propulsion, respectively. Wikipedia claims that the motor is modified to the point that it contains no licensed technology from AC Propulsion, though I could not find the source. The battery cells are stock from Panasonic/Sanyo, but the pack design and thermal control are tesla’s. Note that this is very similar to the Nissan Leaf and the Chevy Volt: they design and assemble their own motors, and they design and assemble their own packs from battery cells manufactured by another company.
Tesla may ultimately fail, or be bought out for pennies on the dollar and stripped for any useful bits. But they’ve put their product in the hands of a thousand owners.
@porschespeed:
Tesla Motors has been losing money hand over fist. Gross margin (not counting overhead, Model S development, etc) on the Roadster appears to be 22%, unless I’m misreading the PR .. so the roadster itself is profitable. Tesla just isn’t selling enough of their $100k+ Roadsters to be profitable as a company, and Roadster sales definitely seem to be approaching a saturation mode in established markets. New markets (asia and australia) will offer some number of future sales, but it’s unlikely Tesla will see net profits until the Model S is in full production.