Auto Giants Turn to Startup Tesla for Battery Technology

Before Elon Musk set out to change the alternative fuel car industry, he was first involved in computers, writing software and founding e-commerce giant, PayPal.  So, then, for Tesla, it shouldn’t be much surprise that its new battery technology is more closely related to computer batteries than it is to cars.

Major automakers including BMW, Toyota, and Daimler are now testing new battery technology created by Tesla Motors which uses packs of lithium-ion batteries compared to car exclusive battery packs.  Tesla currently uses a pack of 6,831 different cells to power it’s high end, $109,000 all-electric sports car up to 240 miles on a single charge.

Critics have concerns that smaller but numerous battery cells may be prone to explosion or fire because they generate more heat than others.  Manufacturers contend that the risk is mitigated with the help of protective coating meant to disperse heat.

By tapping into a market that is double-dipped by both automakers and laptops, companies can merge their research and development spending while relying on the economies of scale to drive prices lower.

Lower electric vehicle costs resulting from inexpensive battery technology, the industry hopes, will help incite new demand for otherwise costly automobiles.  Electric vehicles are more costly than 75% of all current production vehicles, putting them out of reach for budget conscious consumers.  Tax incentives and subsidies have helped reduce costs, but for the most part, efficiency concerned shoppers are still buying gasoline vehicles.

Tesla’s partnership with Panasonic, the company that produces the battery cells, has grown deeper.  Recently, Panasonic made a $30 million injection into Tesla.  Toyota and Daimler also have their own interests in the company, which produced the first real electric vehicle, and plains to bring out a four door sedan in 2012.

While the spotlight continues to be shared mostly between vehicle manufacturers and their race to seize the alternative fuel market, battery producers are in a race of their own.  Already, just a few years into the development of fully-electric vehicles, battery technologies have been improved, replaced, or downright thrown to the side as automakers seek out the best batteries for their vehicles.

Panasonic, LG, General Electric, and Sony, all big names in the electronics industry are all in the race to make the safest, most efficient battery systems at the lowest price.