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Tesla Motors Could Double Global Demand for Panasonic 18650 Lithium-Ion Cells – The Green Optimistic

Tesla Motors started out small and, probably in a money-saving move, decided to use commodity Panasonic 18650 Lithium-ion [Li-ion] cells for its battery packs.

As we know, the economies of scale reduce costs the more production increases. That’s why it is so hard to make a profit on a short production run of practically anything. Big-time automakers, such as Toyota, General Motors, and Volkswagen, sell millions of vehicles per year, making small profits on each on, for big-time profits on the whole. In the case of electric vehicles, such as the Tesla Model S, Nissan Leaf, or the Chevy Volt, since they are produced in such small numbers, it is very difficult to make a profit on them. Fiat CEOSergio Marchionne compared the Fiat 500e to financial masochism, and GM admits they lose thousands of dollars on each Volt they sell.

Somehow, Tesla Motors has managed to beat the odds and produce the Tesla Model S at a profit, and is now worth over $20 billion. Perhaps some of that success is due to making use of a relatively cheap Li-ion cell, the commodityPanasonic 18650, of which about 7,000 make it into each Tesla Model S 85kWh battery pack. Actually, Tesla Motors is the only electric vehicle manufacturer to make use of such asmall cell [Nissan and Chevy Li-ion battery packs are made from fewer numbers of larger cells] and also produces the largest traction battery in any mass-produced passenger electric vehicle on the road today, meaning that Tesla Motors seems to be driving most of the demand for the Panasonic 18650 Li-ion Cell.



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