What if Tesla made all battery cells in-house?

Oct. 26, 2023

In the realm of cell suppliers, Tesla is kingmaker

As we’ve written about in the past, the rise to dominance of CATL, LG Energy Solution and, at one time, Panasonic has been due in large part to their supply relationships with Tesla – the world’s largest manufacturer of BEVs.

Bearing this in mind, we were curious to see what the competitive landscape of cell suppliers would look like today if Tesla, like BYD, manufactured all of its own cells in-house.

The result – as shown below, Tesla would be the second largest cell supplier globally, behind CATL and ahead of BYD.

In the case of CATL, Tesla going it alone would slash the former’s book by upwards of 20% but still leave it as the largest cell supplier globally.

Concerning BYD – Tesla’s newest and smallest supplier – the shift to in-house production would be immaterial.

In regards to LGES, Tesla making its own cells would cut its business by nearly 30%, dropping it to 4th place from 2nd place in the global ranking.

Lastly, for Panasonic – which is deeply reliant on Tesla – the latter switching to in-house cell production would lead to a 78% drop in Panasonic’s EV battery business, sending it down to a lowly 10th place globally from a distant 4th place today.

Adamas take:

To achieve manufacturing scale, it has made sense for Tesla to outsource most cell supply to-date but as the EV market continues to mature and growth slows, it will inevitably make sense for Tesla to do more in-house at which time we would expect CATL, Tesla and BYD to be vying for top spot month after month.



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