However, Tesla is pulling it off, there’s little doubt that its batteries are cheaper, and Thomas believes things will stay that way. “Even if incumbents decided to use cylindrical cells, it will be challenging to engineer a manufacturing process that is economical, and not time consuming. Packaging cylindrical cells is a process Tesla has been refining for over 10 years.”
Tesla’s industry-leading battery cost also has implications beyond the auto industry. Elon Musk has said in the past that the company’s stationary storage business could someday be bigger than its vehicles. Enrique Dans writes in Forbes that “battery manufacturing is set to become one of the most important industries on the planet, and whoever dominates it will occupy a privileged place in many ways, supplying a wide variety of industries from vehicles to household goods, as well of course as electricity generation.”
“Twelve years ago, when he described his company’s ‘secret master plan,’ Elon Musk spoke not only about making cheaper electric cars, but included a third point, which was providing the means to generate zero-emissions electricity, a point that many pundits missed amid the hullaballoo over Tesla cars,” Dans continues. “Today, with the company in the black, it turns out that battery production has been the key to its strategy: the reason why auto industry veterans like Bob Lutz could not understand Tesla’s road map was because Tesla isn’t a car company, it’s a battery company.”
“Tesla isn’t a car manufacturer competing with other automobile manufacturers…Tesla’s vehicles are consumers of the company’s main product: batteries,” Dans concludes. “Rethink your models and your spreadsheets: stop seeing Tesla as a carmaker and start understanding that the company has much more ambitious plans for the future.”