Tesla's Gigafactory 1 battery cells have a 20% cost advantage over LG, according to a new report

Tesla has long been saying it dominates battery cost competition, but a report confirms their claims, as UBS claims that Panasonic's Tesla Gigafactory 1 batteries have a 20% cost advantage over LG's .

Panasonic and LG Chem are considered two leaders in the manufacture of battery cells for the automotive market.

Samsung SDI, CATL and SK Innovation, among others, are closely following.

But thanks to its partnership with Tesla within Gigafactory 1, Panasonic also manufactures custom batteries directly for the manufacturer.

Tesla owns the installation, participated in the design of the cell and is involved throughout the supply chain, while Panasonic is in charge of manufacturing.

At the first announcement of the project, Tesla announced a 30% reduction in costs compared to current batteries purchased by Panasonic in Asia.

The cost reductions of Gigafactory 1 with the new 2170 battery cells were assumed to allow the model 353 base price of $ 35,000.

According to a new UBS report, this has not yet occurred, but this has nevertheless resulted in a significant decrease in costs, which now constitute the main cost of the battery.

They claim to have set up a team of engineers to calculate the cost of the battery cells of each of the major manufacturers. They claim that the batteries manufactured by Panasonic at Gigla Factory 1 Tesla are 20% cheaper than the second best, those of LG Chem (via Financial Times):

According to the report, the cost of Tesla's battery cells is $ 111 per kWh and LG Chem's cost is $ 148 per kWh.

Tesla recently said that its goal was to reach $ 100 per kWh by the end of the year. The new cost level would allow the production of the standard Model 3 battery pack the next year.

In addition, Tesla chairman, responsible for the automotive industry, Jerome Guillen, recently said the company was working on a new, improved battery cell design.

Electrek's Take

I would take this report with a grain of salt. Not only because I have doubts about the fact that UBS has followed their previous dubious report on Tesla's basic model 3, based on a value of $ 35,000, being a car losing money, but also based on their cost analysis of the other cells in the battery.

Audi claims to buy batteries at $ 114 per kWh for its next e-tron quattro. LG Chem would be the supplier, which does not correspond to the costs declared by UBS.

Anyway, I would not be surprised if Tesla's Gigafactory 1 cells manufactured by Panasonic are at the forefront of the industry in terms of cost, but I would not be surprised either if the actual figures reported by UBS were wrong .