But recently, they’ve run into a problem: they need more high-quality batteries, and their options for sourcing those batteries are getting slimmer and slimmer every day.
As ValueWalk notes, batteries are heavy (making shipping expensive), and the tariff on foreign-made batteries is high, making the batteries themselves more expensive. All of this means that Tesla, who’s growing more and more every day, is going to need to find a new solution to sourcing these batteries if it wants to continue to succeed (they do sell electric cars, after all).
That solution is (wait for it) domestic manufacturing.
The Verge recently ran an article on Tesla’s dilemma and suggests that Tesla could start a small manufacturing revolution. Currently, there isn’t much of a battery manufacturing market in the United States–there hasn’t really been a need for one–but Tesla could theoretically invest in its own battery manufacturing facilities, eliminating the problems we just listed about purchasing large foreign-made batteries.
One of the most interesting parts of the article from our perspective was a quote from Steven Chu, former U.S. Secretary of Energy. He said: “U.S. manufacturing is important because innovation in industries like batteries occurs in the manufacturing methods as much as in fundamental electrochemistry and materials science.”
In other words, although technology surrounding batteries certainly needs to evolve, so do the manufacturing techniques involved in their production. The so-called manufacturing revolution hinted at by The Verge could happen if companies like Tesla invest in battery manufacturing. Manufacturers would need to develop new techniques for making these batteries, and those techniques could lead to an industry-wide change in the global battery manufacturing market.
Although it might seem crazy to think that such a dramatic change could be brought about by one company, it’s not totally out of the question. Tesla needs their batteries–that’s for certain. But will they come to the U.S. to make that happen? We’ll just have to wait and see.