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