Panasonic says it is developing a new battery cell for Tesla

Panasonic announced Thursday that it is currently developing a new battery cell for Tesla, based on the US electric vehicle maker’s new cell format, as the Japanese company continues its decades-long partnership with Tesla.

Tesla’s new battery cell, a larger cylindrical format called the 4680 that can store more energy and is easier to manufacture, is key to achieving the goal of cutting battery costs in half and increasing battery production nearly 100 times by 2030.

“We have significant expertise in this battery,” said Hirokazu Umeda, Panasonic’s chief financial officer, at a briefing when the company reported an 11 percent increase in operating profit in the second quarter, beating analysts’ estimates.

“We started doing this right after Tesla’s Battery Day (in September) and are preparing to set up a prototype production line in parallel,” he added.

Panasonic’s decision to work on the new cell for Tesla comes because the brisk sales of Tesla electric vehicles stabilized the profits of their joint battery company in Nevada after several years of production problems and delays at the US partner.

Umeda also said the company has decided to open an additional production line at the Nevada facility next year and increase the facility’s total capacity by about 10 percent to 38 to 39 gigawatt hours (GWh) per year by around 2022.

“We are aiming for a profit margin of around 5 percent for our Tesla battery business within two to three years,” he added.

Panasonic’s operating profit rose to 92.8 billion (around Rs.6,632 billion) from July to September, compared to JPY 83.9 billion (around Rs 5,995 billion) a year ago.

Tesla has announced that it will manufacture its own battery cells in several highly automated factories around the world, but will continue to use its existing cell suppliers Panasonic, LG Chem from South Korea and Amperex from China.

With the advanced battery cell design and manufacturing process, Elon Musk, CEO of Tesla, promised to cut battery costs in half in several years and deliver an “affordable” electric car, although experts have questioned how quickly it can be implemented.

© Thomson Reuters 2020

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