Tesla nets 4680 battery supplier bounty for 2023 as it tries to reroute production to the US over subsidies
Samsung, one of Tesla's rumored future 4680 battery suppliers, is ready with the testing phase of its cells and will put them to mass production in 2023, reports Korean media. Coincidentally, that is when Tesla's first 4680 battery maker - Panasonic - plans to have viable quantities to ship to Tesla as well. Moreover, LG is planning to beat Panasonic to market with its own 4680 cylindrical cell, too, so next year is shaping up to be a watershed moment for Tesla's battery supply abundance.
The electric car maker's head of investor relations went on record recently to announce that for the first time ever Tesla will have access to all of the power packs it needs, be they phosphate batteries for its standard range vehicles, or 4680 ones for its other models, so perhaps that's the production capacity expansion and diversification he was referring to.
Despite those rosy battery supply outlooks, Tesla is currently examining its EV subsidy options under the newly minted Inflation Reduction Act that President Biden celebrated yesterday. It will grant buyers a US$7,500 incentive towards the purchase of a new electric car and will run until 2032, but in order to qualify, EV makers have to start fulfilling certain made-in-America requirements.
Critical battery materials, for instance, can't be sourced from countries with which the US doesn't have a fair trade agreement signed, which excludes the world's largest manufacturing playground China. As a result, Tesla's Korean battery suppliers Samsung and LG are already shedding their material dependencies on China in order to help Tesla qualify for the subsidies.
Moreover, preference will be given to electric vehicles with batteries made in the US, leading to the hasty announcements of a number of new battery factory projects by most every major name in the field. Not only is Tesla now actively exploring the buildout of a lithium refining plant on the Gulf Coast, but it has also paused its plans to install battery-making equipment in its Berlin Gigafactory for the sake of US production, report Wall Street Journal sources from the industry.
Currently, Giga Berlin is only making Model Y cars with batteries shipped from elsewhere, but Elon Musk planned to expand its production capacity with battery assembly as well. The Inflation Reduction Act's subsidy is too good of an opportunity to boost sales in the long run to pass up on, apparently, so it may be changing Tesla's production strategy already, just as the White House intended.