Tesla Vehicles are set to cause us problems...

Tesla Vehicles are set to cause us problems...

How the company who will soon be the worlds largest producer of lithium based cells are going to be upsetting the vape industry in the next quarter... 

Many people are already starting to see problems with supply of 18650 cells. Whether its cost or instability of supply, everyone is feeling the pinch but many are unaware of why, so heres a little update.

It's recently been reported that Tesla are struggling with their own production. If you're not familiar with it, Tesla have built their "Giga Factory" factory in Sparks, Nevada. It's the largest facility of its kind anywhere in the world and in 2016, started producing cells for its power wall products. The factory was designed to be completely self reliant for energy, using a combination of wind, solar and geo-thermal sources. Handy, given its in the middle of the desert. Not so handy when you start having problems with it.

Along with the above reported power supply problems to the plant, they're also reported to be struggling with manpower. A factory in the desert is difficult to reach.

So how does this affect us?

To understand how, it's important to understand that the cells used in vaping were never designed for vaping. All of the stock sold in the vape industry is simply overstock from the accumulator industry. For example, if Sony (Murata) are supplying Bosch for their e-bike power packs and Bosch change the design, or the cell completely, there will be an amount of cells over the required production amount that will become available. This can be millions. This is happening in all industries that use these cells, so normally there's a healthy number on the open market.

Until recently, Tesla have relied heavily on Panasonic for the production of their cells. With the recent problems, Tesla have once again called on their friends at Panasonic to pick up the drop in production, with Panasonic having signed over most if not all cell production capacity to them. There's even rumour that once this run is finished Panasonic will no longer be manufacturing cylindrical cells, so we could see the end of things like the NCR18650B.

Obviously this has a knock-on affect. Large companies who were buying Panasonic cells will now be knocking on the doors of Samsung, LG, Sony (Murata) and others meaning we're going to see less available cells. It also means the cost of them are probably going to go up. We're already seeing this with the Sony VTC5A.

What are Nu Battery doing to combat it? 

Along with large investment in lots of new in-house equipment for compliance marking and systems to better process orders for both wholesale and retail, we will be working even more closely with suppliers to make sure we have a clear idea on what will be available and when. Previously this has never been an issue. Whether we ask for 200, 2000 or 20,000 of something, we can have it in a week. Going forward we will obviously need to to keep a much closer eye on things to continue to meet the high bar we have set for service.