Tesla to Acquire German Battery Assembly Manufacturer

Tesla has announced an agreement to acquire a German battery assembly company named German ATW Automation. German ATW Automation makes battery modules and packs for automobile manufacturers like Tesla.

ATW was previously a subsidiary of Canadian ATS Automation Tooling Systems Inc, which has suffered a financial hit due to a slump in orders. ATS had previously announced that the German subsidiary had been sold to an unnamed third party. ATW and ATS have reportedly not replied to requests for comment on the sale to Tesla.

ATW’s 120 employees have completed more than 20 battery production lines for international automakers, according to information on ATS’ website. The acquisition may be part of Tesla’s efforts to ramp up its battery production capacity and reduce the cost of manufacturing battery packs for its electric vehicles over the next three years. The new battery assembly plant could be used to support Tesla’s planned vehicle manufacturing facility in Berlin.

Statements from Tesla indicate that it has delivered 139,300 vehicles in the third quarter of 2020 and is on track to deliver over half a million vehicles by the end of the year. Its planned future model releases include the Cybertruck, a Semi truck, and a $25,000 model that has been rumored to be capable of traveling 300 miles on a single charge. CEO Elon Musk previously canceled a model with a 250-mile range, saying that the range was likely to be “too low” to be attractive to buyers.

Cheaper, more capable batteries are likely to make all three models attractive to discerning consumers. Walmart Canada recently tripled its Semi truck order in the wake of Tesla’s announcement of an improved battery manufacturing process, which would be attractive to Walmart Canada’s efforts to reduce carbon emissions.

Tesla also announced a new “tabless” lithium-ion battery at its Battery Day event. Manufacturing the new batteries will require less water and fewer moving parts than the production of its existing batteries. Musk has indicated that innovations in battery technology for automobiles, plus investments in improved infrastructure for electric vehicles, could help his electric vehicles compete with gas-powered cars and eventually make them obsolete.

Some tech insiders did express doubts that electric vehicles would ever be suitable for long-range trips like the multi-day hauls of long-distance semi trucks, however. Bill Gates had this to say:

“The problem is that batteries are big and heavy. The more weight you’re trying to move, the more batteries you need to power the vehicle. But the more batteries you use, the more weight you add and the more power you need.”

However, this seems to leave out the fact that Tesla’s electric semi trucks can already get a range of up to 300 miles on a single charge while hauling loads that are several times heavier than the battery. That’s suitable for many of the single-day round trips conducted by retailers like Walmart.

The acquisition of German ATW Automation could simply be one of several moves that Tesla has made recently that could reduce its reliance on third parties in its supply chain and better enable the production of its improving technologies. It has also shown an interest in making its supply chain more environmentally friendly by making deals with “zero-waste” mining companies like the Canada-based Giga Metals.