If it achieves its planned production levels--21,000 cars this year, perhaps 40,000 by 2015--its voracious appetite for lithium-ion battery cells will only increase.
The massive scale of cell purchases by Tesla Motors [NSDQ:TSLA] has already boosted global production levels.
It may soon use as many '18650' lithium-ion cells itself as the entire industry produced before the Model S went into production a year ago.
his reality has already shaken up the consumer battery industry.
Panasonic, Tesla's primary battery supplier (and investor), went from a loss of 2 billion yen in the second quarter of 2012 to a profit of 4 billion yen in the most recent quarter--largely on the strength of the voracious increase in demand from the Model S.
The carmaker's rapid production scale-up has prompted Panasonic to expand capacity, by reopening previously idled plants, while simultaneously committing to build entirely new production lines.
In addition, Tesla is close to signing production deals with Samsung SDI and other major players to secure even more future production capacity.
7,000 cells x 21,000 cars
Underlying the frantic efforts of the battery industry to ramp up capacity for Tesla are the cold, hard statistics of the Model S battery system.
Each and every 85-kWh Tesla battery pack contains more than 7,000 automotive-grade cells, all in the common '18650' cylindrical format.
The entire industry produces about 660 million cylindrical cells a year; the 18650 format is by far the most popular.
By the end of June, Panasonic had already delivered 100 million cells to Tesla, and the Model S production rate is rising. Plans are in place for Tesla to reach an annual pace of 40,000 cars per year by the end of 2014.
40 percent of global capacity
If the company hits those numbers, and if the 85-kWh battery proves as popular overseas as it has in the U.S., by next year the Model S alone will soak up almost 40 percent of global cylindrical battery production.
