Tesla Motors Inc (NASDAQ:TSLA) is apparently considering building what would be the world’s largest lithium-ion battery factory. Forbes contributor Ucilia Wang reports that Tesla CEO Elon Musk made comments on the subject last night during the automaker’s investor conference call.
Tesla considers massive battery factory
Last night on the conference call, Musk talked about their ideas for the new battery factory, which he said would be “comparable to all of the lithium-ion battery production in the world—in one factory.” If Tesla Motors Inc (NASDAQ:TSLA) moves forward with plans, it would probably be located somewhere in North America.
According to Musk, the facility would likely take in the raw materials and complete the entire process of creating the cells and then assembling the battery packs. Currently Tesla gets its battery cells from suppliers and has them assembled somewhere else. He also said the factory would be eco-friendly in various ways, like using solar power and recycling old battery packs to make new ones. In addition, the facility would create batteries which are similar if not the same as the battery packs they use now.
Tesla challenged by battery supply
So far battery supply has been one of the biggest challenges facing Tesla. Tesla Motors Inc (NASDAQ:TSLA) recently announced that it was expanding its battery agreement with Panasonic so that it will buy three times as many battery cells than it did before. Now the automaker plans to buy at least 1.8 billion battery cells from the company over the next four years, but that still may not be enough.
Musk has said repeatedly that they’ve been having problems getting enough battery cells to keep up with the demand for their vehicles. He also said this has resulted in them not marketing their vehicle as aggressively as they would if battery supply wasn’t a problem.
Some North American customers have had to wait longer for their vehicles so that the company could make deliveries to customers in Europe who had been waiting for their vehicles for years. Tesla Motors Inc (NASDAQ:TSLA) opened its showroom in Beijing recently without much marketing because the automaker didn’t want to create more demand than it would be able to meet.
Shares of Tesla Motors Inc (NASDAQ:TSLA) plunged in premarket trading, falling more than 11% on Wednesday following Tuesday night’s earnings report. Investors and analysts had been expecting far more from the automaker than may have been realistic, especially in light of how many problems battery supply is causing for the company. The automaker’s guidance also wasn’t as good as was expected, further frustrating bullish investors.