Mitsubishi Delays U.S. Outlander Plug-In Due to Tight Battery Supply. Paging Elon Musk.

By · December 30, 2013

Mitsubishi Outlander Plug In

Mitsubishi has sold 11,300 plug-in Outlanders around the world this year, mostly in Japan. (Mitsubishi graphic)

Mitsubishi is delaying to 2015 the U.S. arrival of its Outlander plug-in hybrid, which was planned to go on sale here next year. The reason? A critical lack of battery supply from its main supplier, Lithium Energy Japan (LEJ, a joint venture with the Korea-based GS Yuasa). Mitsubishi should have learned a thing or two from Tesla’s strong-arm tactics on this very same issue.

Elon Looks Ahead

Remember when Tesla Motors CEO Elon Musk was warning that sales of the Model S could be compromised by battery supply issues? “One of the bigger challenges for us is going to be lithium-ion cell production,” Musk said at the gala Teslive event last July. “We need a lot of batteries… Our issues right now are actually not so much demand generation as they are production related. In order for production to grow, we have to have the whole supply chain move in cadence.”

In Tesla’s case, each car uses 7,000 cells, and Musk pointed out that, when (or if) its low-cost Model E is in production and car sales total 500,000 a year, the company’s demand could “exceed the entire laptop industry by a decent margin.” In October he also said, none too subtly, that he was talking to other battery suppliers (evidently including Samsung) to supplement the supply.

A Big Battery Commitment

I asked Panasonic about Musk’s comments at the time, and the company responded with a strong statement. Panasonic was “committed to supplying and supporting Tesla business with the goal of providing 300 million battery cells by next year,” said battery executive Jeff Howell.

Mitsubishi Outlander Plug In

Mitsubishi is delaying the much-anticipated U.S. intro of the plug-in hybrid Outlander to 2015. (Mitsubishi photo)

In late October, Tesla and Panasonic announced that its earlier agreement had been updated and expanded, and the battery maker would “nearly two billion cells over the course of four years.”

Too Much Demand, Too Few Cells

GS Yuasa, meanwhile, was the supplier of the ill-fated packs in the Boeing Dreamliners, and also to electric and hybrid cars from Honda and Mitsubishi. In 2012, it opened a new Japanese factory in part intended to supply 15 million cells annually to Honda, but also to support 50,000 Mitsubishi i-MiEVs and the new Outlander plug-in. But, reports Automotive News, Mitsubishi was getting only 2,000 packs a month from LEJ. A shift of EV production to a new plant in September upped that output to 4,000 a month.

Mitsubishi now has the capacity to produce 60,000 Outlander plug-ins annually, up from 30,000 in 2013. But the cell supply is iffy enough to delay the U.S. rollout. Mitsubishi said it's open to adding more battery suppliers beyond its own joint venture. Toshiba supplies some cells for Japanese i-MiEVs now.

Electric Dreams

Growing capacity is pretty important, because the company has big electric dreams, including a revamped i-MiEV and plug-in versions of both the Outlander Sport and Pajero SUV by 2017. “Mitsubishi has not said where it will get those batteries,” Automotive News said. Maybe the company needs a Japanese version of Elon Musk riding herd on the supply chain.

Comments

· · 47 weeks ago

It's important to keep in mind that Tesla competes with laptop manufacturers for the output of Li-ion battery makers, since they build their packs from massive arrays of the same tiny cells used in portable electronics (which is why Musk makes the comparison). By contrast, Mitsubishi's packs are built from large-format cells intended for use in transportation applications, so they really don't have as many alternative suppliers to tap. Their best choices would probably be either Toshiba (from whom they currently buy SCiBs for JDM use because of their high tolerance for quick-charging, though with slightly shorter range), or Nissan (who is building major battery manufacturing capacity and is now partnered with Mitsubishi in development of a next-gen "world car" EV along with other projects).

Nissan is particularly interesting because its North American division lacks any plug-ins beyond the LEAF or hybrids aside from the absurd Pathfinder. Getting a rebadged Outlander PHEV to add to their lineup might be a good trade in return for solving Mitsubishi's battery problems.

I hope something gets worked out. Mitsubishi's failure to to bring this potentially game-changing vehicle to the U.S. is a lost opportunity at the very least; in retrospect, this ever-growing delay (and the opening it creates for slower-witted but better funded rivals to steal their thunder) may be seen as a strategic blunder of epic proportions.

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