With Tesla (NASDAQ: TSLA) enjoying a positive bout across markets due to stronger-than-expected deliveries and a massive order from Hertz to the tune of 100,000 vehicles, Panasonic Corp. has ramped up its efforts to meet the automaker’s “next level” demand for EV batteries.
Earlier in October, Tesla revealed a record number of global car deliveries for the third quarter, which has prompted the automaker to shift to a more cost-effective lithium-iron-phosphate (LFP) battery for its standard-range cars. Thus far, Chinese-based Contemporary Amperex Technology Co. has been Tesla’s main supplier of such batteries, but rival Panasonic is looking to change that.
Although Panasonic said it does not anticipate a decline in Tesla’s demand for its existing batteries, the Japanese company has unveiled a new prototype of a next generation battery for Elon Musk. Panasonic president Kazuo Tadanobu recently showed off the company’s 4680 battery, which is said to be a “massive breakthrough” in reducing the cost of electric vehicles. The battery cell, which is named after its dimensions of 46 millimetres wide and 80 millimetres tall, is said to have five times the capacity of the cells currently supplied to Tesla.
However, despite the potential to significantly lower input costs for Tesla, Panasonic acknowledged that the batteries are difficult to manufacture. The battery maker is in the midst of creating a prototype production line for the breakthrough cells, but has yet to decide if it will transition the technology into mass production.
Panasonic’s latest commitment to strengthen its relationship with Tesla comes as the automaker embarks on boosting its sources of battery supplies from companies other than Panasonic. So far, Elon Musk has already established supply contracts not only with Contemporary Amperex Technology Co., but also with South Korean-based LG Energy Solution, which is a subsidiary of LG Chem.
Information for this briefing was found via Bloomberg. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.