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How Tesla and Elon Musks Electrification Ideals Increased the Cost of Stark Drive

05/12/2021
Hello Everyone!

One of our main goals at Stark Drive have always been to keep the costs of our electric bikes as low as possible thereby lowering this barrier of entry to 'go electric' and this is engrained in our company mantra. With our electric bikes starting at only $399 and fully configurable, this aspect seems clear, however, one important thing to keep in mind with our electric bikes is that the largest percentage of the total cost to manufacture one of our electric bikes is the battery pack that is custom manufactured for Stark Drive using state of the art Panasonic 18650 batteries.

Just as we have in previous years and with the goal of ensuring our batteries are as recently manufacutred as possible late winter, we placed our standard order to have our custom battery packs manufactured when we informed that our per battery cost was going to double from our historical rates. This unexpected icnrease was much higher than the standard inflationary cost increase that happens every year and dumbfounded us.

On speaking with our trusted assembly factory they were asking whether or not we would be interested in changing the cell type in our battery packs to help maintain the prices we had paid in previous years and this was someone we would never comprimise on so we declined however we then reverted with the question as to why these standard and widely used Pansasonic 18650 cells had increased in price so dramatically. The answer surprised us: Tesla.

Tesla has recently built and is operating an assembly plant in China and the demand for their cars has been very healthy. Together with their battery partner: Panasonic they have been supplying China with their all electric vehicles as fast as they could manufacture them. The side effect of this as we learned was that Tesla has contracted not only the entire production of Panasonic Cells but also all the LG 18650 cells that are manufacutred in the region including all capacity in South Korea, Japan and even any domestically produced capacity along with the other electric vehicle manufacturers in China such as Nio.

This has had a knock on effect for the electric bike manfuactures in China and has increased battery costs considerably.

The requirement for 18650 cells and lithium cells in general does not look like it will be abating in the near future and

manufacturers are scrambling to bring more manfuacturing facilities online but for the short term this is going to be something that is unavoidable.

Even though, this does put a strain on the manufacutring of our bikes, our personal belief at Stark Drive is that the electrification of transportation is a good thing and the sooner that we can take all ICE vehicles off the road the better for both the health of our increasingly urbanized populations as well as the Planet.

Sincerely

Oscar Stark
CEO, Stark Drive LLC