Panasonic will begin mass production of new lithium-ion batteries that increase the range of electric vehicles by over 15% as early as 2023, and the first deliveries will go to Tesla. The new battery is expected to give vehicles the longest range in the world after battery weight and will compete with competing South Korean and Chinese battery manufacturers. Given that electric vehicles will be able to travel farther on a single charge, Panasonic expects the transition to electric vehicles to accelerate and therefore invest heavily in the development of such batteries.
Panasonic began developing new batteries with 4,680 cells at the request of Tesla. Tesla says its current flagship Model S has a range of about 650 km on a single charge. With the new battery, calculations show that the range will improve to around 750 km.
CEO Elon Musk says the company wants to make its own batteries to replenish supplies, and that Tesla will continue to supply batteries from Panasonic or other battery manufacturers. Batteries make up 30% of the total cost of any electric vehicle.
The new battery will be twice the size of the older versions, with a fivefold increase in capacity. This will allow car manufacturers to reduce the number of batteries used in each car, which will also reduce the time required to install them in vehicles. Given the high efficiency of these batteries, their production will cost 10% up to 20% less, compared to older versions.
The global development race for safer, cheaper, and longer-lasting batteries is intensifying. Mercedes-Benz plans to begin mass production this year of a new model that can travel 1,000 kilometers on a single charge using batteries made by China’s CATL.
Japan’s Panasonic is expanding its Wakayama prefecture plant and bringing in new equipment for mass production of new Tesla batteries, with a fresh investment of about 80 billion yen ($ 704 million). The company already has electric battery drives in Japan and the United States and supplies batteries for electric vehicle drives operated by Tesla in California.
The annual production capacity of the Wakayama plant is still under discussion, but it is expected to be around 10 gigawatts per year, which is equivalent to 150,000 EV. This is about 20% of Panasonic’s production capacity.
Panasonic plans to partially begin operations this year to establish safe, efficient techniques before launching mass production next year. The company plans to expand mass production at its plants in the United States or other countries. In addition to Tesla and Mercedes, other car and battery manufacturers are entering the sector race.
The Chinese CATL also announced a series of investment plans, with a total investment of nearly 2 trillion yen. LG Chem has raised about 1 trillion yen by listing its affiliate and plans to use the proceeds to invest in the United States. Toyota Motor plans to invest 2 trillion yen in battery production and development by 2030.
While fully solid state batteries are considered to be safer next generation batteries, it is expected to take some time before the version becomes commonplace. Panasonic aims to make its new lithium-ion battery the “new global standard for electric vehicles” and wants to supply other carmakers.
Thanks to demand from Tesla, Panasonic once had a large share of the electric vehicle battery market. However, CATL and LG Chem in 2019 began supplying batteries at Tesla’s plant in China, with Panasonic losing market share, which it is now trying to regain through the development of a new battery.