Readers of this blog are well aware of the power and consequences of supplier visibility that is attributed to the Apple supply chain.  Knowledge of supplier contributions to Apple’s product value chains can literally make fortunes or cause significant financial harm, depending on the news or developments, whether real or rumored.

It now appears there is a new contender on the scene, that being Tesla’s supply chain.

This week, the Wall Street Journal highlighted evidence to this effect.

Recent rumors were that battery manufacturing firm Samsung SDI, a component-making division of diversified electronics manufacturer Samsung, was in-line for a new procurement contract for lithium-ion batteries to power the newly announced Tesla Model 3 vehicle. Keep in-mind that Tesla partnered with Panasonic to build the giant battery manufacturing gigafactory located in Nevada. That partnership required Panasonic to pony-up a considerable financial sum to help in building this new facility as well as incorporating advanced manufacturing processes.

Tesla founder and CEO Elon Musk took to Twitter to clarify that Tesla was indeed working exclusively with Panasonic on the Model 3 electrical power needs, and that news articles claiming otherwise were incorrect. According to the WSJ, that one tweet caused Samsung SDI market capitalization to drop by $580 million while the market cap for Panasonic jumped $800 million in the same day.

The report notes: For investors chasing buzz, the electric-car maker has increasingly been a driving force among shares of automobile-component suppliers in Asia, akin to what Apple news does to electronic-parts makers.”

The article further noted:”Tesla moves stocks, even if the news is hard to confirm.”

Two other examples were provided to reinforce this trend. Hankook Tire shares shot-up in May on news that it could become a Tesla supplier.  Similar news sent shares of battery producer LG Chem soaring last October. Taiwan based Hota Industrial Manufacturing; sole supplier of gearboxes saw it shares driven down in April amid rumors that Tesla was seeking a second supply source.

Thus, Tesla has obviously become another high-visibility global supply chain, one where supplier fortunes move on the slightest news, and one that will increasingly be subject to attempts to gain all forms of insider information.

There is of-course, another twist to this new high visibility supply chain. That is that automotive supply chains will increasingly shift toward more high technology components and software composition in the overall supply chain.  Then, there are the continually rumors that Apple maybe working on developing its own branded electric car.

So goes the new era of elite supply chains, those few innovative players that literally move financial markets on the basis of being the recognized market disruptor, where supplier contracts, news or supply chain hiccups determine financial fortunes.

Bob Ferrari