Panasonic to increase its battery capacity

TOKYO -- Panasonic Corp. plans a big increase in lithium ion battery capacity next year, for both hybrid and electric vehicles, including the Tesla Model S sedan.

The company will add capacity at three sites in Japan:

1. Panasonic will add a fourth line at its Kasai plant in Hyogo prefecture, just west of Osaka. That factory makes prismatic lithium ion batteries for Toyota Motor Corp., Ford Motor Co. and Audi AG.

2. It will add a line at its Sominoe plant in Osaka, which makes cylindrical lithium ion batteries for Tesla Motors Inc. alongside batteries for personal computers.

3. It will begin cylindrical battery pro- duction for cars at its Kaizuka plant, also in Osaka.

The ramp-up comes amid complaints from Tesla CEO Elon Musk that bottlenecks in battery supply are limiting sales of the Model S.

Panasonic has been the sole battery supplier for the Model S, but Tesla is in talks with Samsung SDI of South Korea.

Panasonic says its expansion aims to meet growing demand for lithium ion batteries in hybrid and electric vehicles. It also would offset shrinking business in traditional batteries for cell phones and computers, which is being squeezed by low-cost rivals in China.

Panasonic officials declined to detail how much capacity it will add. Its global capacity for automotive prismatic lithium ion batteries has surged from just 100,000 cells a month in 2010 to 2 million cells a month today.

The number of cells per vehicle varies by manufacturer and from car to car. But 70 cells per battery pack is a rough figure for hybrid vehicles, Panasonic says. That would put Panasonic's global capacity as high as 28,000 vehicles per month, though actual capacity varies because plug-in hybrids and EVs use different numbers of cells.

Panasonic declined to give output figures, but Erika Egami of Panasonic's planning center, said the company must expand capacity to supply upcoming orders.

Panasonic already makes the box-shaped prismatic batteries for the Audi Q5, Toyota Prius V, Ford Fusion and C-Max hybrids, as well as for the plug-in variants of the Prius hatchback and the Ford Fusion and C-Max. It also supplies the Toyota eQ electric minicar.

The company has additional customers for batteries for hybrid vehicles not yet being produced, Egami said. She declined to name them or discuss volume.

The company's flagship Kasai plant, a dedicated auto battery factory, has three lines for prismatic lithium ion cells. One produces standard hybrid batteries. Two lines produce bigger batteries that can be used in either plug-in hybrids or electric vehicles.

Adding the fourth line would roughly boost capacity by a third.

Officials declined to give capacity figures for cylindrical lithium ion batteries because that capacity targets almost exclusively a single automotive customer: Tesla.