Tesla #4: Suppliers and Software
When Tesla started off, there were no battery manufacturers who had either the reliability or the volumes (quantity) needed for a niche electric car wannabe (like Tesla), let alone one with mass market ambitions (delusions?). The supply chain then was yet another challenge Tesla faced, writes Tim Higgins. Early on, one of its lithium-ion battery suppliers, LG Chem, sent it a letter with a dire demand: Return our batteries. Why? There had been several high profile issues with lithium-ion batteries – one incident involved a fire on a cargo plane (a different manufacturer); another was Apple’s recall of 150,000 laptops (batteries by LG Chem). After those incidents, LG Chem’s legal department was worried that the any fire in a car would bring lawsuits on LG Chem as well. Tesla’s assumption that it would create the market and therefore new battery suppliers would join in was proving to be wrong. The reason for the lack of interest was the same as LG Chem – the fear of lawsuit