Tesla Reportedly Developing its Own Battery Cells in ‘Secret Lab’

According to a new report by CNBC News, Tesla is secretly working to manufacture its own battery cells in order to reduce dependence on Panasonic. The electric car maker has been relying on Panasonic for its battery cell needs since signing an extensive partnership deal with the Japanese company back in 2014.

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Citing five current and former employees at Tesla, the publication is claiming that the company’s R&D teams are now “focused on designing and prototyping advanced lithium ion battery cells,” as well as new processes that could allow Tesla to produce cells in high volumes.

A recent research by IHS Market has shown that the battery pack and battery cells are the main cost component in an electric vehicle. At Tesla’s annual shareholders meeting earlier this month, CEO Elon Musk acknowledged that the company has been “battery-constrained” in the past:

Making its own battery cells would also fit with Musk’s general ambition to make Tesla as “vertically integrated” as possible, which means developing, manufacturing and selling everything it can — even its own enterprise software.

But manufacturing cells at high volume would be another challenge for a company that recently implemented cost-cutting measures and is still struggling to perfect its high-volume vehicle production.

In the last few weeks, Tesla has posted multiple job listings for engineers involved in battery cell design, equipment for producing battery cells and related manufacturing processes.