Major Automakers Adopt Tesla’s Battery Technology

Toyota Motor Corporation, BMW AG and Daimler AG may adopt Tesla Motors’ approach to powering their electric vehicles. Instead of the heavier, more expensive lithium-ion batteries produced specifically for electric vehicle use, California-based Tesla Motors Incorporated re-purposes lighter, cheaper lithium-ion batteries commonly used in laptop computers.

Larger lithium-ion batteries currently being used by most automakers cost between $700-$800 per kilowatt hour to manufacture. Tesla founder and former CEO Martin Eberhard said mass-produced battery packs using small consumer-electronics batteries could cost as little as $200 to produce.

Tesla’s $109,000 Roadster sports model is powered by battery packs containing 6,831 battery cells manufactured by Panasonic Corporation. The battery packs give the Roadster a range of up to 245 miles before needing recharging.

Toyota and Daimler are major stakeholders in Tesla, and Panasonic bought a $30 million stake in the company in November.

Tesla assembles the battery packs currently being used in Daimler’s Mercedes A-class and Smart electric vehicles, and Toyota plans to begin using Tesla’s battery packs in its 2012 RAV4.

Sanyo Electric Company, the world’s largest battery maker, expects lithium-ion battery sales to triple from 1.5 trillion yen to 5 trillion yen over the next decade. Panasonic is a major shareholder in Sanyo.

Automakers hope that the economy of scale of rechargeable consumer-electronics batteries can help them reduce their manufacturing costs and reduce their sticker prices.

Advanced Research Japan analyst Koji Endo said the use of consumer-electronic batteries “may lead to the total component cost of an electric car getting lower than that of a gasoline car. As the cost lowers, there’ll be more likelihood that retail prices of electric cars will drop.”

Nissan Motor Corporation’s new Leaf all-electric vehicle and General Motors Corporation’s new Chevrolet Volt plug-in electric hybrid sell for $32,780 and $41,000 respectively. Bloomberg New Energy Finance reports that electric vehicles, on average, are priced higher than 75% of the vehicles currently being sold. They also cost about twice as much to manufacture as traditional gasoline-powered vehicles, in part because of the high cost of their batteries.

In October, J.D. Power and Associates predicted that global sales of hybrid, plug-in hybrid and all-electric vehicles will reach 954,000 units and account for 2.2 percent of all new passenger vehicle sales this year.

In November, Bloomberg New Energy Finance predicted that government incentives could boost sales to nine percent of global all-electric and hybrid vehicle sales by 2020.

Last month, Panasonic opened a new lithium-ion battery plant in Osaka, Japan, which increased its annual production capacity to 1.4 billion units.

Toyota president Akio Toyoda indicated that the use of Tesla’s battery packs may not completely replace its current battery technology. “When the customer decides ‘This is the car I want,’ we want to be that full-line maker who has the answer for that customer,” he said, adding, “By using both car batteries and laptop batteries, we are able to provide customers with a wider variety of choice.”

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