‘Unknowns’ delay Tesla’s ramp-up of its own cutting-edge batteries

Tesla said on Wednesday it would rely on suppliers to meet battery demand this year, as the necessity of learning new technologies is holding back its plan to boost production of its own batteries

Tesla Inc is falling short of CEO Elon Musk's target to make its own next-generation batteries, sparking questions over the top electric car maker's ability to maintain its blistering expansion of auto production next year and beyond.

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Tesla said on Wednesday it would rely on suppliers to meet battery demand this year, as the necessity of learning new technologies is holding back its plan to boost production of its own batteries.

Tesla is an outlier in its industry - it is the only major automaker that makes batteries itself without partnering with suppliers, although like other companies, it buys batteries from companies, mostly based in Asia. Batteries are the most expensive component in electric vehicles and bringing down their cost is crucial to expanding EV popularity.

If Tesla succeeds, it will assure itself a steadier supply of inexpensive, higher-range batteries, a foundation for its own goals of producing 20 million vehicles a year. But it needs such new batteries next year to avoid scrambling for supplies just as the global industry scales up electric production.

Ford Motor Co, for instance, announced a major new deal with Chinese battery maker CATL on Thursday.

For Tesla, "time is running out and that end of the year deadline is fast approaching, meaning the company will need to work quickly to resolve the remaining issues to meet the volume they need," Benchmark Mineral Intelligence (BMI) analyst Caspar Rawles told Reuters.