Panasonic announced in early March that it will expand its production base for lithium battery cells in Japan’s Wakayama Prefecture. The expansion will consist of two new production lines for 4680 cells that are used for powering electric cars. Japanese news agency NHK also reported around the same time that Panasonic is looking to buy land in the US for a new battery plant.
Tesla introduced the 4680 cylindrical cell in 2020. As indicated by the numbers, this battery format has a diameter of 46mm and a height of 80mm. Compared with the smaller 2170 cell that is currently used in Tesla vehicles, the 4680 cell contains five times more energy and extends the driving range to 750km. Tesla will be adopting the 4680 as its standard battery format in 2022 so as to further optimize the cost structures and performances of its vehicles. Hence, the major battery manufacturers have been in a rush to set up production capacity for 4680 cells.
Panasonic unveiled its prototype for the 4680 cell in October 2021, and there are news reports stating that the product entered the volume production phase near the end of January this year. The latest information about the expansion of the Wakayama base confirms the speculation that Panasonic will massively scale up the production of 4680 cells during its fiscal year of 2023 (from April 2023 to March 2024). Kazuo Tadanobu, CEO of Panasonic’s battery division, said that the development of the 4680 cell is in response to Tesla’s needs, and the related capacity expansion will help strengthen Panasonic’s tie with the electric car maker.
Panasonic has long been one of Tesla’s key suppliers. The batteries for the Model S and X are made at its facilities in Japan, while its joint venture with Tesla in Nevada (i.e., the Tesla Gigafactory 1) makes the battery for the Model 3. Tesla is also producing 4680 cells in-house at its facility located in Fremont, California. There have been reports that Tesla will soon launch a new vehicle model that adopts the 4680 cell. Moreover, the Tesla Gigafactory 5 in Texas will also begin making 4680 cells for the Model Y.
Other battery manufacturers are eager to challenge Panasonic’s position in Tesla’s supply chain. Citing industry sources, South Korean news website Pulse reported on March 8 that LG Energy Solutions has reached “technical implementation and prototyping” for the 4680 cell. However, the company will unlikely be able to start mass production this year. Samsung SDI is rumored to be working on a large-size cell as well. Regarding Chinese battery manufacturer CATL, several news outlets have reported that the company could be contracted to manufacture the 4680 cell that is designed by Tesla. CATL so far has been supplying LFP batteries used in Tesla’s vehicles for the Chinese market.
