Panasonic is poised to become the main maker of Tesla’s (TSLA.US) new battery. Panasonic said the battery will have more power to meet Tesla’s needs. It is understood that for the past year and a half, Panasonic has been working on the development of the 4680-type battery, which it intends to sell to Tesla. The battery will increase 5 times in energy, 16% in cruising range and 6 times in power.
Performance excellence allows electric cars to drive with fewer parts, and Tesla CEO Elon Musk touts the technology as the key to unlocking a “$25,000 electric car.”
Kazuo Tadanobu, chief executive of Panasonic’s energy business, said in an interview that “a lot of energy has been spent” developing the new battery over the past few months. It is understood that currently, the Tesla Model 3 starts at around $41,000, and the purchase also comes with certain tax benefits.
Panasonic executives say Tesla has acknowledged that Panasonic’s new battery is viable and meets its required level of performance. It is reported that Panasonic will start mass production of 4680-type batteries from April 2023, and plans to add two production lines at its factory in Wakayama, western Japan.
It has to be said that for the Japanese electronics giant, the foray into next-generation batteries is a bold new move. Despite soaring demand for Tesla’s batteries, rivals LG Energy Solution and Contemporary Amperex Technology Co.
In contrast, Panasonic has been slow to expand the scale of production capacity. Instead, Panasonic has been touting its strengths in battery safety, emphasizing that it prioritizes profits over market share. There are signs that Panasonic has great hopes for its new battery.
Last week, foreign media reported that Panasonic is considering building a new factory in the United States to supply Tesla with 4680-type batteries. But Tadanobu said there has been no decision on that. “Locations for potential new plants will be assessed based on partnerships and economic conditions in certain regions, and for now Panasonic is fully committed to laying a ‘solid foundation’ for the production of the 4680 trams at its Wakayama plant in Japan,” he said.
However, both analysts and Musk himself have warned companies about the difficulties of mass-producing the 4680 cells. The larger size of the battery makes it more susceptible to particle contamination, a common cause of electric vehicle battery fires when tiny metal fragments enter the center of the battery.
But Tadanobu believes Panasonic’s focus on safety has helped it move forward with the project. “Panasonic’s strength is its ability to “enhance battery performance while using sophisticated craftsmanship to maintain safety,” Tadanobu said.
Panasonic firmly believes this battery has the potential to transform the transportation industry. Tadanobu believes that the 4680-type battery will have a “considerable impact”, helping to reduce the cost of electric vehicles, allowing the latter to be rolled out more widely.