Panasonic Expanding Footing at Tesla Gigafactory for Improved Battery Capacity

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【Summary】Tesla and longtime partner Panasonic are taking another step, as reports indicate that the battery manufacturer is looking to add an additional production line to the automaker’s facility in Nevada.

Original Vineeth Joel Patel    Oct 19, 2020 7:30 AM PT
Panasonic Expanding Footing at Tesla Gigafactory for Improved Battery Capacity
An aerial view of Tesla's gigafactory near Reno, Nevada.

Japan's Panasonic and Tesla are long time partners. The two companies first inked a deal back in 2014 and have been working together on electric vehicle batteries ever since. Despite some rumors claiming that Tesla was looking to dump Panasonic to make its own EV batteries in-house, a new report from the Reno Gazette Journal states that the two are looking to deepen their partnership.

Panasonic Increasing Foothold

The outlet claims that Panasonic is looking to expand its operations at Tesla's Gigafactory 1 in Nevada. The battery maker is also making an investment into new infrastructure to make higher-capacity batteries that are more affordable.

"There's some construction work that needs to take place over the next couple of months," said Carl Walton, vice president of production engineering and facilities for Panasonic Energy of North America. "Then early next year, we'll be installing new equipment with production starting shortly after that."

A new line, which would become the 14th at the Gigafactory, is expected to boost the facility's battery capacity. Before the expansion, the outlet claims the facility is at 35 gigawatt-hours per year. All Panasonic will say about the expansion is that output will increase by roughly 10 percent. In addition to new construction, Panasonic plans to hire more workers. Currently, there are 7,000 workers at the Gigafactory, but the expansions could add an additional 100 extra positions.

Construction, according to TechCrunch, has already started. In addition to coming out with a new line, Panasonic will also install new technology for the "2170" lithium-ion battery cell that it supplies to Tesla. The new tech that Panasonic's working on is expected to improve energy density by 20 percent over the next five years.

Why The Expansions Is Surprising

The outlet points out that the expansion comes at a time when the industry wasn't too sure if Tesla and Panasonic would continue working with one another. Roughly a year ago, the Nikkei Asian Review stated that Tesla and Panasonic were looking to stop expansion plans because of a potential risk. The outlet claims that Panasonic's CEO expressed some concern over Musk's unpredictable behavior.

Last year, Musk put out a critical tweet of Panasonic's reservations in boosting investments at the facility. Tesla's CEO blamed Panasonic for bottlenecking its Model 3 production by failing to adequately ramp up battery capacity for its EVs.

While the issues came up just last year, it looks like Panasonic and Tesla are on better terms now. "The EV market throughout the world continues to explode and the demand is there," Walton said. "This is our way of helping our partner (Tesla) to continue supplying electric vehicles to the market."

While extra battery capacity will surely be a good thing for Tesla, we're sure the electric automaker is more interested in the other aspects of the expansion, mainly the reduction in pricing and the new tech. Pricing has always been an issue with Teslas, while extra range would put the automaker further ahead of the competition.

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