Tesla had previously provided batteries to Mercedes and Toyota through a separate cooperation agreement. Battery manufacturing is an area that analysts and industry officials have said. Compared with traditional automakers, this American electric car manufacturer has a competitive advantage.
“Tesla is open to licensed software and provides powertrains and batteries. We are just trying to promote sustainable energy development, not overwhelming competitors!” Musk said on Twitter.
Tesla is open to licensed software and provides powertrain and batteries. We are just trying to accelerate the development of sustainable energy, not overwhelming competitors!
-Elon Musk (@elonmusk) July 29, 2020
It is not clear what type of battery it will provide. Tesla currently has a battery joint venture with Panasonic and also purchases batteries from Contemporary Amperex Technology (CATL) in China and LG Chem in South Korea.
Batteries are the most expensive and important component of electric vehicles (EV).
Park Chul-wan, a South Korean battery expert and professor at Seocheng University, said: “Supply may lower the barriers to entry for start-up electric car manufacturers, posing a potential threat to traditional car manufacturers with their own platforms.”
He said: “If the strategy is successful, it will increase the electric vehicle market’s dependence on Tesla.”
Musk said in a recent conference call that the real limit to Tesla’s growth lies in producing batteries at reasonable prices, and that the company will expand its business with Panasonic, CATL and LG Chem.
Musk also said in 2014 that Tesla will allow others to use its patents in order to speed up the development of electric vehicles by all manufacturers.
© Thomson Reuters 2020