# Battery IP



## airj1012 (Jan 29, 2019)

There appears to be some uneasiness in the relationship between Tesla and Panasonic. I'm curious, who owns the IP and is Panasonic interchangeable? With Tesla potentially going with other partners for Giga 3 in China, it seems like Panasonic is merely a manufacturer and is replaceable to a degree. I know I'm oversimplifying this, but any insight into what's going on here would be awesome. Will Tesla be able to execute well without Panasonic? Will battery quality potentially worsen with a new supplier that isn't as much of an industry leader? Thanks!

https://asia.nikkei.com/Spotlight/C...ide-the-strained-Tesla-Panasonic-relationship


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## garsh (Apr 4, 2016)

airj1012 said:


> Will Tesla be able to execute well without Panasonic?


No they wouldn't, but it's not going to come to that.

Panasonic's battery business's growth is almost entirely dependent on Tesla. If they lose Tesla, they'll have a very hard time finding other companies to make up the loss. Likewise, Tesla is entirely dependent on Panasonic to supply it with enough battery cells. There is currently no other supplier able to meet that demand. It would be in both companies' interests to diversify their partnerships, but it's going to be several years before that's even possible.

Panasonic builds the cells to Tesla's specifications. Tesla should be able to hand over the chemical makeup desired to any other battery cell manufacturer and have them create the cells it needs. And it sounds like this will be their plan in China, at least for the Chinese-market cars. The main issue would be preventing intellectual theft of that secret sauce when they hand over the formula to a Chinese battery manufacturer. I'd imagine that Tesla will stick to a slightly older chemistry for Chinese cars - at least to start - to see just how risky working with a Chinese battery manufacturer will be.


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## airj1012 (Jan 29, 2019)

OK thanks. So this sounds pretty similar to HW3. Tesla designed the product (battery or chip) but is having a manufacturer (Panasonic or Samsung) actually build the product. There shouldn't be a loss in quality of the product, as long as the manufacturer is build to spec, but due to the origin of the product, theft of intellectual property is higher.

Great insight, thanks.


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## MachV (Jan 15, 2019)

garsh said:


> No they wouldn't, but it's not going to come to that.
> 
> Panasonic's battery business's growth is almost entirely dependent on Tesla. If they lose Tesla, they'll have a very hard time finding other companies to make up the loss. Likewise, Tesla is entirely dependent on Panasonic to supply it with enough battery cells. There is currently no other supplier able to meet that demand. It would be in both companies' interests to diversify their partnerships, but it's going to be several years before that's even possible.
> 
> Panasonic builds the cells to Tesla's specifications. Tesla should be able to hand over the chemical makeup desired to any other battery cell manufacturer and have them create the cells it needs. And it sounds like this will be their plan in China, at least for the Chinese-market cars. The main issue would be preventing intellectual theft of that secret sauce when they hand over the formula to a Chinese battery manufacturer. I'd imagine that Tesla will stick to a slightly older chemistry for Chinese cars - at least to start - to see just how risky working with a Chinese battery manufacturer will be.


Unfortunately, USA can count on China stealing IP whenever it benefits them. this is the culture there whether you like it or not, and no matter what the leaders say. Sorry Giga3. Hopefully they can make $ before someone there capitalizes on the IP theft. Chinese govt serves Chinese, not USA. So if theres a problem at Giga3, Tesla is not on the right side of the bargaining table. China govt could technically steal the whole factory and production and IP and there is nothing Tesla can do.


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