Panasonic, the renowned Japanese battery manufacturer, has announced today its plans to further expand its battery production line in Nevada, USA. The expansion is aimed at supplying batteries to Tesla’s Giga Nevada facility, which is currently under construction. The driving force behind Panasonic’s continuous investment in expanding its production capacity can be traced back to a crucial statement made by Tesla.
Tesla’s Giga Nevada superfactory, upon completion, is set to become one of the largest buildings on Earth. Within this ambitious construction project, Tesla initially planned for a battery production line capable of manufacturing 105 GWh of battery cells and 150 GWh of battery packs per year. However, for the past two years, Tesla’s focus has primarily been on optimizing its existing production lines, resulting in delays and a conservative expansion scale at the Nevada facility, maintaining a mere 30% of the original plan.
Last year, Tesla revived its plan for the Nevada facility and invited Panasonic to join forces. As per the latest reports, Panasonic is ready to expand its production capacity by an additional 10% beyond its current capabilities, wholeheartedly supporting Tesla’s vision. The reason behind Panasonic’s bold investment in expanding its operations lies in a single statement made by Tesla.
According to statements from Panasonic executives obtained by Nikkei News, Tesla’s message to “buy as much as (Panasonic) can produced was simple yet impactful. This statement has not only instilled Panasonic with unwavering confidence in an increasingly competitive battery industry but has also prompted them to make substantial investments in expanding their production facilities.
▲Current expansion progress of the Nevada plant, with yellow representing the final scope and blue representing Panasonic’s production line. (Source: Video Screenshot)
Currently, Panasonic predominantly manufacturers 2170 batteries, which are extensively used in most Tesla models produced in the United States. However, both Tesla and Panasonic have plans to establish production lines for 4680 batteries at the Nevada facility. These batteries will serve as the primary power source for Tesla’s highly anticipated vehicles, including the Cybertruck and Tesla Semi, enabling mass production.
With the continuous growth of the electric vehicle market in the United States, Tesla is determined to secure a stable supply of batteries. In addition to their collaboration with Panasonic, Tesla has also embarked on in-house battery production initiatives. For Panasonic, apart from the Nevada facility, the company has announced plans for a battery factory in Kansas and is currently constructing a new facility in North America. The combined efforts of these expansions are poised to leave competitors, particularly Ford, envious of Tesla’s battery capacity.
Nevertheless, while Tesla telling Panasonic that they will “buy as much as (Panasonic) can produce” may sound promising, the key question lies in determining pricing arrangements. Several years ago, Tesla and Panasonic encountered multiple disputes over battery production. Tesla urged Panasonic to develop more advanced production technologies, while Panasonic voice concerns regarding low profit margins that did not align with the costs involved. This ultimately prompted Tesla to shift toward in-house battery production. Now, as both parties gear up to produce 4680 batteries, only time will tell how long their cooperative efforts will endure.