Tesla’s secret lab in Freemont, California is currently in the process of developing battery cells. Present and former employees of Tesla have made reports on recent developments, with plans to manufacture them into their own electric vehicles. The company is dependent on Panasonic to develop battery cells at the moment and may affect future production roles, especially since Tesla signed a partnership deal with Panasonic in 2014.


Tesla’s secret battery could cut costs, add performance upgrades, and extend toe energy stored in each battery cell. (Image Credit: Getty Images/Sean Gallup)

This could benefit Tesla in the long run by offering inexpensive battery packs and cells that offer a performance upgrade for their electric vehicles, without needing to pay extra for resources, and sharing information and data with other vendors and partners associated with Tesla. According to IHS Markit, battery cells and battery packs make up for most of the costs when producing an electric vehicle.


During a shareholders meeting earlier in June, Elon Musk noted that battery constraints are one of the limitations in Tesla’s current production, affecting sales of their electric vehicles and energy storage systems like Powerwalls and Powerpacks. Tesla is presently carrying out tests on its new battery system in a “secret” lab known as “skunkworks lab” in Tesla’s Kato Road facility, located a few minutes away from its main plant in Fremont. It’s also where Tesla produces their Model 3, Model S and Model X vehicles. Their batteries are manufactured at the Gigafactory found in Sparks, Nevada, co-owned and under control by Panasonic.


If Tesla were to develop their own battery cells, it would allow the opportunity for Tesla to develop, manufacture, and sell their own products, even their own software.


Those involved in the R&D teams for Tesla’s battery are undergoing developments of a prototype based on an advanced lithium-ion battery cell system. Tesla is also in the process of developing machinery that can help the company to produce battery cells in mass quantity. Even though there aren’t any official reports from Tesla on the experiments, there have been a few job postings in the past month searching for engineers who are experienced in battery cell design, battery production machinery and manufacturing.


Even if Tesla is successful with its own manufacturing of battery cells, they are not likely to cut their partnership with Panasonic and other battery companies at any time. Employees working for Tesla who know about cell supplier negotiations say the company is likely to continue working with Panasonic and L.G. to provide the battery cells that are used in the Model 3 vehicles in its Shanghai factory, which could start producing battery cells by late 2019, mass producing in 2020.


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