Panasonic eyes 3rd North American EV battery plant

TOKYO — Japanese electronics and battery giant Panasonic, a key supplier to Tesla Inc., is planning a massive ramp-up to quadruple its battery manufacturing capacity and boost the energy density of its battery by 25 percent by the end of the decade as it readies for the electric vehicle age.

As part of the expansion, Panasonic said it will announce a third North American battery production site by March 2024. That site will follow the last year's selection of De Soto, Kan., as the home of a $4 billion battery factory that will supply Tesla. Panasonic also has a plant in Nevada.

Through the fiscal year ending March 2031, Panasonic will expand its global battery production and procurement capacity to 200 gigawatt-hours, up from 50 GWh in the fiscal year ended March 31, 2023. The investment will feed a near quadrupling of battery revenue to 2.5 trillion yen ($17.9 billion) in the period as EV sales take off, Panasonic Energy CEO Kazuo Tadanobu predicted.

"In order to respond to quickly growing EV demand," he said, "we will be increasing capacity."

Speaking Thursday during Panasonic Holdings Corp.'s annual business strategy briefing, Tadanobu said his company also planned next-generation improvements to its cells.

Energy density of Panasonic's lithium ion batteries should increase to 1,000 watts per liter in 2030 from 800 watts per liter in 2022, he said. Improvements will be applied to a next-generation version of its 2170 cylindrical battery and the upcoming high-density 4680 cylindrical battery.

Both batteries are used by Tesla, though Panasonic has also agreed to supply Lucid Motors.

Regarding the new North American battery production site, Tadanobu said there are several candidates in mind, though he declined to elaborate. The plant, he added, will be equipped with Panasonic's most advanced and cost-efficient manufacturing processes.

He said the site will be around the same size as the Kansas site, or about 30 GWh of capacity.

Panasonic plans to produce the 2170 batteries in Kansas and 4680 cells at a factory in Wakayama, Japan, with output starting in the April-September period of 2024. Panasonic delayed mass production of the 4680 batteries at Wakayama to improve their performance.

The Wakayama-made batteries will be shipped to a North American customer, Tadanobu said.

He added that production of 4680 batteries could be added to Kansas in the future.

The Tesla Model Y crossover, which became the world's bestselling nameplate in the first quarter, uses a 4680 battery, though those cells are manufactured in-house by Tesla.

The upcoming Tesla Cybertruck, to be made in Texas, is also expected to use 4680 batteries.

Meanwhile, in Japan, Panasonic plans to consolidate and expand its battery development and manufacturing footprint to create mother facilities for its global business. The company plans to add 1,000 employees through March to boost battery development and production here.

The build-out will include a new cell technology center that will open near Osaka in 2025.

Panasonic plans to increase the performance of next-generation batteries by reducing the use of nickel and rare-earth metals while increasing the use of graphite, Tadanobu said.