In November last year, Tesla Model Y once again lengthened the pickup cycle due to the shortage of supply, with a delivery time of 10 to 14 weeks. The impact of the supply chain crisis on Tesla can be seen. In the fourth quarter of the 2021 earnings call, Musk admitted that Tesla will face production constraints brought about by the supply chain in 2022.
Chips and batteries are the most important components in the electric car supply chain. After two years of chip shortages, power batteries are on their way to becoming a true supply deficit in 2021. There appears to be such a scenario in 2022: whoever controls the power battery will capture the car industry's lifeline.
There is a scarcity of components, and there are an increasing number of competitors on the track. Tesla has delegated distinction to 4680 batteries in the very competitive electric car industry. The cell capacity of the 4680 battery is 5 times that of the preceding 2170 battery, allowing it to extend the cruising range of the equivalent model by 16 percent while also reducing the body weight by 10%. Musk stated unequivocally that the supply of 4680 battery pairs will not be disrupted this year.
Tesla will surpass Toyota as the world's leading automaker in 2021, with yearly sales of 935,700 vehicles. Reaching the million-unit delivery goal for Tesla entails ensuring battery supply. Another reason for transitioning to 4680 batteries is because solid-state batteries are less technologically sophisticated and have difficulty mass-producing in large quantities. As a result, Tesla has taken the lead in engaging with manufacturers such as Panasonic and LG, who have declared that they are willing to trial manufacturing. Panasonic has stated that pilot manufacturing might begin in March of this year, while LG has stated that it would begin producing for Tesla in 2023. The battery number is 4680. Phenomenon: Whoever controls the power battery will control the car industry's lifeblood.
At the same time, in order to avoid power battery firms interfering with Tesla's manufacturing process and sales owing to a lack of production capacity, Tesla decided to take matters into its own hands and began supporting its own batteries. Tesla manufactures its own 4680 batteries in four mega plants in California, Texas, Nevada, and Berlin, Germany, according to international media sources.
Tesla has made significant preparations for the arrangement of 4680 batteries, including placing cooperation orders with LG and Panasonic. It's worth mentioning that Tesla "buys mines" on a massive scale in order to successfully self-produce. In 2021, Tesla will conclude a nickel supply arrangement with BHP Billiton (BHP.US) and PronyResources, a French New Caledonian mining firm. Tesla would also acquire 75,000 tonnes (165 million pounds) of nickel concentrate from Talon's Tamarack nickel project in a deal worth more than $1.5 billion. Nickel is a critical raw ingredient for 4680 batteries since it is a key material for high-power batteries.