Tesla looks to dominate battery production in both the electric vehicle and energy storage markets

Tesla [NASDAQ: TSLA] continues to dominate the global market for electric vehicle lithium-ion battery production with Gigafactory partner Panasonic. For some context, InsideEVs reports on industry-wide growth: "In 2016, sales of lithium-ion batteries for electric vehicles increased by some 66%, up from 12.3 GWh of capacity to 20.4 GWh according to recent data compiled by the EV Sales Blog. The pace of battery production growth is even faster than the growth of EVs themselves (up ~40% worldwide last year). "


Above: MWh of electric vehicle lithium-ion batteries produced in 2015 and 2016 (Source: InsideEVs via EV Sales Blog)

What about Tesla? It's reported that: "There are five major battery manufacturers... lead by Panasonic/Tesla with ~6.7 GWh of installed capacity,which was an improvement of 45% from last year, but while still losing some market share (to 32%)." It's no wonder Electrek recently reported that Tesla is "hinting at [a battery] breakthrough cost below $125/kWh" based on the industry-leading production volume seen in these charts.


Above: Tesla Gigafactory partner, Panasonic, has nearly a third of the MWh of electric vehicle lithium-ion batteries produced in 2016 (Source: InsideEVs via EV Sales Blog)

And it's not just electric vehicle battery production where Tesla is leading the pack. CleanTechnica reports that: "Tesla and South Korea’s LG Chem are tipped to dominate the US battery storage market, which is expected to be worth as much as $US50 billion by 2020.  Analysts at investment bank Morgan Stanley suggest Tesla and LG Chem are best positioned to take big market shares in a market that it predicts will grow faster than most others expect." Furthermore, "The US market, however, will be just a fraction of the global market – which the Morgan Stanley analysts expect will be 7 to 8 times bigger."


Above: Tesla's Powerpack installation at the Southern California Edison Mira Loma substation will reduce the LA Basin's reliance on fossil fuels (Youtube: Tesla)

Morgan Stanley's report, "Energy Storage: An Underappreciated Disruptor – says the US market will be focused mainly at the utility level, where power companies and developers will see value in providing grid stability such as ancillary services, and to meet peak demand and supply variations." Can anyone move in on Tesla and LG in the energy storage space? "Morgan Stanley says other competitors will struggle to match the scale and manufacturing efficiency advantages of these two players."