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Panasonic is Looking to Purchase Land in the U.S. to Build a 'Mega-Factory' to Produce EV Batteries for Tesla

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【Summary】Japan's Panasonic Corp is looking to purchase land in the United States for a “mega-factory” that will churn out advanced electric vehicle batteries for electric automaker Tesla, Japan’s public broadcaster NHK reported on Friday. According to NHK, Panasonic is considering sites in either Oklahoma or Kansas, which will be close to Tesla’s new EV factory under construction in Austin, Texas, which is scheduled to open on April 7.

Eric Walz    Mar 04, 2022 3:15 PM PT
Panasonic is Looking to Purchase Land in the U.S. to Build a 'Mega-Factory' to Produce EV Batteries for Tesla
Panasonic currently produces batteries for Tesla at its jointly operated gigafactory in Sparks, Nevada.

Japan's Panasonic Corp is looking to purchase land in the United States for a "mega-factory" that will churn out advanced electric vehicle batteries for electric automaker Tesla, Japan's public broadcaster NHK reported on Friday.

According to NHK, Panasonic is considering sites in either Oklahoma or Kansas, which will be close to Tesla's new EV factory under construction in Austin, Texas, which is scheduled to open on April 7. Panasonic will invest billions to construct the new U.S. plant, although no timeline for the project was announced.

NHK did not cite the source of its information but Panasonic said to Reuters that the plans were not publicly announced.

Just last week, Panasonic said its will begin producing a new lithium-ion battery by the end of March 2024 at its Wakayama Factory in western Japan.

The new battery design, known as a "4680" format, was unveiled by Panasonic in Oct 2021 at a media event. The numerical format of the battery is based on its dimensions of 46 millimeters (mm) wide by 80 mm tall. 

Panasonic says the new and improved nickel-cobalt-aluminum 4680 cell will store more energy, reduce battery costs by up to 50% and drive a 100-fold increase in battery production by 2030. 

Panasonic has been Tesla's battery partner for over a decade. Tesla signed an agreement with Panasonic to be its key battery supplier for its U.S.-built vehicles. The two companies assemble the battery cells and related components at Tesla's factory in Nevada.

Tesla also entered into a partnership in China with battery maker Contemporary Amperex Technology Limited ("CATL"). CATL aims to become the world's biggest supplier of EV batteries.

CATL also plans to rapidly expand its partnership with Tesla in China and become its biggest battery supplier. China is the world's biggest auto market. CATL aims to supply half of the battery cells Tesla uses globally in electric vehicles and roof energy storage, a senior source at the Chinese company said last summer. 

In December, CATL began phase 1 production at its new EV battery factory in China. Once completed, the plant will be the world's largest EV battery factory, with an annual production of 120 GWh. It will be more than three times the size of Tesla's gigafactory in Nevada.

CATL is investing 17 billion yuan (US$2.6 billion) in the plant and said it will create about 10,000 jobs once fully operational.

The first phase of operations will have an annual capacity of 60 GWh and the additional 60 GWh for phase 2. The annual output of 120 GWh is enough to power around 1.2 million EVs. 

In March of last year, Panasonic sold its stake in Tesla that was worth at the time about 400 billion yen ($3.61 billion). Panasonic bought 1.4 million Tesla shares at the bargain price of $21.15 back in 2010, two years before Tesla introduced the Model S sedan.

A Panasonic spokesperson told Reuters last year that the decision to sell its stake in Tesla was made as part of a review of shareholdings in line with corporate governance guidelines. 

However, Panasonic said there will be no charge in its business partnership with Tesla going forward and the two companies will continue to produce batteries in the U.S. for Tesla's electric vehicles.

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