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This seems to confirm the initial point, which is that Tesla mainly outsources its most critical ingredient (batteries) to outside suppliers. Suppliers that are

This seems to confirm the initial point, which is that Tesla mainly outsources its most critical ingredient (batteries) to outside suppliers. Suppliers that are, incidentally, increasingly competing directly with its main lines of business. That might be ok in the car industry, where people will pay a premium for brand names. Seems bad if your goal is to dominate energy storage.

toomuchtodo 3y ago
No one builds energy storage at the rate Tesla does, so while this risk keeps being surfaced on HN ("but what about..."), until there is material movement from competitors, "meh." If it's so easy, by all means, do it. But talk is relatively cheap. https://www.energy-storage.news/tesla-deployed-nearly-4gwh-of-energy-storage-in-2021/ https://www.energy-storage.news/tesla-deployed-nearly-4gwh-o... https://www.energy-storage.news/tesla-deployed-6-5gwh-energy-storage-in-2022-thinking-carefully-about-next-megapack-factory-site/ https://www.energy-storage.news/tesla-deployed-6-5gwh-energy... https://carboncredits.b-cdn.net/wp-content/uploads/2023/07/Tesla-battery-energy-storage-system-deployment.jpg.webp https://carboncredits.b-cdn.net/wp-content/uploads/2023/07/T... (Source: https://carboncredits.com/tesla-413m-megapacks-revolutionize-energy-grid/ https://carboncredits.com/tesla-413m-megapacks-revolutionize...) > Such tremendous growth has been particularly attributed to ramping up Tesla’s Megapack production capacity in its recently built 40 GWh Megafactory in California. The company aims to produce 10,000 Megapacks each year in this factory. > Earlier this year, Tesla also revealed plans to construct another 40 GWh Megafactory in Shanghai, China to meet the robust demand for its energy storage systems. Construction will start later this year. https://electrek.co/2023/12/22/tesla-launches-project-build-new-megafactory-china/ https://electrek.co/2023/12/22/tesla-launches-project-build-... The global market for energy storage is enormous, approaching almost half a trillion dollars by 2030. https://www2.deloitte.com/content/dam/Deloitte/us/Documents/energy-resources/us-energy-and-resources-global-energy-storage-renewable.pdf https://www2.deloitte.com/content/dam/Deloitte/us/Documents/... https://www.precedenceresearch.com/energy-storage-systems-market https://www.precedenceresearch.com/energy-storage-systems-ma...
- matthewdgreen 3y ago
  I'm as excited about this progress as anyone. But (1) Tesla's Megapack business isn't objectively that big compared to its other businesses, (2) while it may be big in the future, that assumes they don't face serious competition from cheaper suppliers, (3) Tesla currently seem to be hugely reliant on Chinese suppliers and factories to build its storage, with no immediate plan to change this, and (4) the Chinese government and battery sector has made clear that it intends to dominate these industries at any cost. Saying "I'm not worried about this" is like saying you're not worried about a giant truck that's speeding directly at you. The question I'm asking in this thread is whether Tesla has a plan to avoid getting hit by it.
  - toomuchtodo 3y ago
    I assume their plan is to continue to have the business run by the human equivalent of an AI reward maximizer. It has worked for them so far to have obsessive people in key leadership positions, and I would expect it to continue to work. Without material non public information from Tesla internal, hard to say either way, we can only speculate. Past performance does not guarantee future returns, but still valuable signal.

toomuchtodo 3y ago

No one builds energy storage at the rate Tesla does, so while this risk keeps being surfaced on HN ("but what about..."), until there is material movement from competitors, "meh." If it's so easy, by all means, do it. But talk is relatively cheap. https://www.energy-storage.news/tesla-deployed-nearly-4gwh-of-energy-storage-in-2021/ https://www.energy-storage.news/tesla-deployed-nearly-4gwh-o... https://www.energy-storage.news/tesla-deployed-6-5gwh-energy-storage-in-2022-thinking-carefully-about-next-megapack-factory-site/ https://www.energy-storage.news/tesla-deployed-6-5gwh-energy... https://carboncredits.b-cdn.net/wp-content/uploads/2023/07/Tesla-battery-energy-storage-system-deployment.jpg.webp https://carboncredits.b-cdn.net/wp-content/uploads/2023/07/T... (Source: https://carboncredits.com/tesla-413m-megapacks-revolutionize-energy-grid/ https://carboncredits.com/tesla-413m-megapacks-revolutionize...) > Such tremendous growth has been particularly attributed to ramping up Tesla’s Megapack production capacity in its recently built 40 GWh Megafactory in California. The company aims to produce 10,000 Megapacks each year in this factory. > Earlier this year, Tesla also revealed plans to construct another 40 GWh Megafactory in Shanghai, China to meet the robust demand for its energy storage systems. Construction will start later this year. https://electrek.co/2023/12/22/tesla-launches-project-build-new-megafactory-china/ https://electrek.co/2023/12/22/tesla-launches-project-build-... The global market for energy storage is enormous, approaching almost half a trillion dollars by 2030. https://www2.deloitte.com/content/dam/Deloitte/us/Documents/energy-resources/us-energy-and-resources-global-energy-storage-renewable.pdf https://www2.deloitte.com/content/dam/Deloitte/us/Documents/... https://www.precedenceresearch.com/energy-storage-systems-market https://www.precedenceresearch.com/energy-storage-systems-ma...

matthewdgreen 3y ago
I'm as excited about this progress as anyone. But (1) Tesla's Megapack business isn't objectively that big compared to its other businesses, (2) while it may be big in the future, that assumes they don't face serious competition from cheaper suppliers, (3) Tesla currently seem to be hugely reliant on Chinese suppliers and factories to build its storage, with no immediate plan to change this, and (4) the Chinese government and battery sector has made clear that it intends to dominate these industries at any cost. Saying "I'm not worried about this" is like saying you're not worried about a giant truck that's speeding directly at you. The question I'm asking in this thread is whether Tesla has a plan to avoid getting hit by it.
- toomuchtodo 3y ago
  I assume their plan is to continue to have the business run by the human equivalent of an AI reward maximizer. It has worked for them so far to have obsessive people in key leadership positions, and I would expect it to continue to work. Without material non public information from Tesla internal, hard to say either way, we can only speculate. Past performance does not guarantee future returns, but still valuable signal.