Tesla acquires high bar systems this may not be a blockbuster financial deal but this one has massive implications if you're a long-term Tesla investor or fan currently Tesla has one major problem and that's their battery production rate they can't make enough batteries fast enough to fulfill their vehicle and energy storage demand you Milan has said on numerous occasions that battery cell production is the primary limiting factor for Tesla's growth across all sectors if model 3 production is limited you can imagine the issues that will arise when model why Tesla semi the next gen Roadster and cyber truck are due to come online not to mention the massive utility scale projects that will hit the balance sheet when Tesla has the battery supply to fulfill the demand a good problem to have but a problem nonetheless let most of the masses in these so-called financial analysts miss the mark while they attempt to predict delivery numbers in the short term while we focus on the facts and the heartbeat of what's driving Tesla's entire business model the battery tech and production capacity I've also seen a number of Tesla influencers saying that panasonic is getting the axe in 2020 I'm eager to talk about this in October of 2019 and lobbyists registration documents filed with the government of Ontario Tesla said its first objective was to quote provide input and make recommendations to the government and its agencies regarding policies programs regulations and decisions that impact the demand for the adoption of solar energy battery energy storage and related infrastructure enter high bar systems founded in 1974 high bar has been a privately owned canadian-based company in Richmond Hill Ontario their primary focus has been on the design development and manufacturing of precision dispensing pumps for industrial automated liquid dispensing applications they're a leader in the precision making of small cell batteries through a highly automated pump injection system they integrate their pumps into filling systems and manufacture turnkey battery systems for their customers they've also established subsidiary operations in China the US and Germany high bar China is a wholly foreign-owned enterprises WFO ii established under Chinese law in 2003 high bar is world renowned for their pumps and filling systems high bar is already leader in the equipment for the Chinese battery industry high bar focuses a great deal on the automation this is key of filling systems pumps and fillers that are customized for the companies they work with over 90 percent of high bars revenues are based on global export sales the revenue breakdown has been thirty nine percent in the US thirty-seven percent in China and only 3.9 percent in Canada the primary industry high bar serves does fluctuate from year year based on industry trends but on a normalized basis thirty percent of their business is already serving the battery industry this number should approach 100 percent now that they're owned by Tesla unless of course these industries are continually served by high bar and the profit numbers just hit Tesla's bottom line I don't think this outcome is likely as we know Tesla's focus on transitioning the world to sustainable energy far more than they are on the bottom line numbers at this stage at the heart of high bar systems operations was their engineering team that use state-of-the-art 3d modeling with 3d mechanical simulations they're also fully vertically integrated sound familiar which means they can produce virtually any part required for their systems in-house they're a world leader in the development of battery manufacturing tech and are well known for their high-speed integrated battery assembly lines with over 40 years of experience they have significant investments in R&D intellectual property patented technical know-how and manufacturing capabilities for automated production of lithium-ion and other batteries their pumps have earned respect and recognition worldwide for their accuracy reliability and versatility they specialize in custom automated solutions for their customers high bar has been frequently recognized as a global leader and one of the top private companies in Canada they've been named one of Canada's best managed companies for four years in a row they were named the best international business with over 97 percent of their business coming from international markets they were honoured by the Toronto Board of Trade with a global trade catalyst award and have been named one of Canada's top ten private companies numerous times they were awarded two million dollars in april of nineteen to use for developing high-efficiency lithium ion manufacturing systems specifically for energy storage their CEO is ian mccall who is now the senior director of Engineering at Tesla and he has worked a high bar for the past 34 years Mian started a high bar in 86 as a mechanical design specialist and progressed his way up the ranks of the company eventually taking over as CEO in 2006 he oversaw the restructuring of high bar systems ownership from the founders family with a management buyout that resulted in high bar becoming one hundred percent employee-owned ian has traveled extensively to China on a monthly basis since the 1980s and has been an advocate of Canadian companies doing business in China here's Ian on what's primarily led to high bars growth fundamentally entering new markets was the foundation of high bars growth 95% of what high bar designs and manufacturers here in Richmond Hill is export to global markets innovation is really sort of a quintessential part of what we do the reason why we can sell our automated systems to these consumer producing companies is because we have leading-edge technology our awesome team of highly skilled engineers tool makers machinists and support staff gives us the engine to to build the growth in the companies I have to say the average tenure of a high bond employee is over 14 years so that says something high bars focus on innovation automated manufacturing specifically for lithium-ion cells and trust what the Chinese markets will fit incredibly well with the fabric of Tesla simply put high bar will have more to do with the battery manufacturing side than it will the actual battery composition advancements which is where Maxwell should come in Tesla is interested in improving the yield and rate of battery cell production in high bars a prime candidate for Tesla to integrate into their operations high precision dispensing is key to eliminating waste and improving ratios clearly Tesla still needs to do all that it can to bring down manufacturing costs that will result in better profit and loss numbers or lower price vehicles that can speed up the mass market adoption rate here's the deal as you saw Tesla stated their primary focus will be in regard to energy storage solutions given this statement it's possible that this acquisition was more for Tesla's energy business than it was for their cars which no one's really talking about of course I think a lot of this technology and we'll also translate over to their IV battery production but this hasn't been what Tesla has stated publicly everyone has seemingly jumped to conclusions that the high bar acquisition means Tesla will be quickly cutting ties with Panasonic and making their own batteries here's why I don't think that's the case yet as we know Tesla's current bottleneck is battery supply instead of immediately cutting ties with Panasonic why wouldn't they keep those manufacturing lines operational for a while until they scale their own battery manufacturing process that way they're only adding more production capacity without reducing it at all for any period of time for Tesla to just quit the Panasonic production which has provided batteries for almost 1 million cars that relationship would have to be incredibly terrible or the cost savings of making their own batteries would have to be drastic although there were some negative Panasonic headlines over the past few months on the q4 called just last night Elon praised Panasonic and said their relationship has been great overall so yes in the future I believe at some point Tesla would love to cut ties with Panasonic to become 100% vertically integrated but it could be years later before their in-house battery manufacturing is scaled to meet or exceed the battery production that would need to be replaced without Panasonic in the picture additionally if Tesla starts producing their own batteries while maintaining a partnership with Panasonic they'll have far more leverage in contract negotiations since they aren't as reliant on Panasonic LG or CA TL Tesla making their own batteries is no small feat and is not something that in my opinion can be implemented and scaled effectively on the timeline that many are expecting even for Tesla from supply chain logistics manufacturing line setups staffing and many other factors it will take time to transition 100% of battery production in-house sandy Munro spoke with Shawn Mitchell about this very topic recently so do you think a key I'm gonna I'm gonna kick this question over tomorrow since it's sort of battery related do you think that in order to be competitive with Tesla's range you have to build your own create your own chemistry produce your own battery cells there would be a 10-year project okay so you know there are going to be leaders in the battery industry and the you a lot of the electrochemistry these are under patents they're gonna have to be licensed whoever comes out on top is probably going to win but just due to the sheer volume of batteries that are going to be needed in the next five years you you know you basically have three to four new battery companies that are out there you've got Panasonic you've got Samsung you've got LG and you've got C ATL out of China and those are the big four everybody else is going to be trying to find a niche in there probably the outlier is BYD they make their own batteries so they make their own cars so they're in a position if they can get everything put together to really kind of lead because I can make the car I make the batteries I've got everything in house but are we going to do it well that would be the question there's the end of the day if you're gonna see somebody come up with something new it's gonna be a solid state battery okay or it's gonna be some way of controlling lightning the super capacitors super capacitors right um that's that's where that's where if I was going to put money in advanced research that's where it's stick it I wouldn't the next iteration a nice energy like Mark just said why would I ever want to try and figure out how to do new chemistry as opposed to as opposed to Panasonic or something it's ridiculous you can't compete with these guys they've been doing it forever so I wouldn't I wouldn't look at that I'd be looking at what can we do that would be a step change and I'm I'm positive that Elon Musk is also looking at that he's got to be I mean he's often been fond of super capacitors for many many years and so that's one of the reasons why I think the Maxwell acquisition is quite interesting because it's not just the the dry the derived battery electrode tech but the super caps is something that max was done since they first started the company in the eighties or nineties a dry battery electrode technology is game-changing I think if it comes I asked now if this sounded like a foreign language these guys are saying that it would make far more sense for Tesla to make their own batteries only if it was going to be a next generation type tech witch sandy thinks will be a solid-state battery what do you guys think how soon will we see the next gen battery tech from Tesla let me know what you think in the comments all right guys so came outside for a second to get some fresh air I've been inside most of the day researching and editing but with regards to the giveaway so what happened with the last video I posted Thursday it did pretty well got up to like 50,000 views pretty quick and then it was taken down I went I went back on my YouTube account couple days later the video was gone long story short there was a copyright claim that somebody submitted for a quick like 15 second clip of one of the model wise wise sightings and so I had to reach out to him to get that light back so I reached out to this guy and he ended up reversing the claim we work something out and he was he was pretty cool about it so the video is now back up but with that being said the video is down pretty much the entire last week so my wife and I didn't have a chance to go through all the comments yet so what we're gonna do is sometime hopefully over the weekend we're gonna sit down and go through the comments and then our next video which will probably be next Thursday we'll have an updated list of entrants and of course if you comment on this video you also have more chances to be chosen we're going to go through these comments as well and I'll put the video of the tussle sign that we're giving away up on the screen but as always the guys thank you for watching I really appreciate it and I look forward to the next video



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Tesla Acquires Hibar Systems - The End of Tesla and Panasonic Partnership?