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Panasonic Increasing Tesla Battery Production, & Partnering On New 4680 Battery Cells

News today from Panasonic is that it is working with Tesla to produce the 4680 cells. Panasonic is also expanding battery production capacity at Gigafactory 1 in Nevada.

There was so much unveiled at Tesla Battery Day, and so much of it was seemingly revolutionary in the battery industry and in electric vehicle design and development, that it’s been hard to mentally digest all of it. Additionally, certain details were left out that we’ve been trying to piece together since then. One question has been: what’s up with the Tesla–Panasonic relationship?

In particular, with regards to Tesla’s new battery cell design (the 4680 battery cells revealed at Tesla Battery Day), many have wondered if Tesla would produce these entirely by itself of continue to partner with Panasonic, or some other company, to produce them. I think the broadest assumption has been that Tesla is doing its own thing with the 4680 cells. News today from Panasonic, however, is that it is working with Tesla to produce the 4680 cells.

“We started working on it immediately after Tesla’s Battery Day and are also preparing to set up a prototype production line in parallel,” Panasonic Chief Financial Officer Hirokazu Umeda said on a shareholder call.

“We have considerable know-how for that battery.”

Panasonic had a couple of other Tesla-related updates on its shareholder conference call earlier today as well. Umeda indicated that Panasonic was increasing battery cell production capacity at Tesla Gigafactory 1 (Giga Nevada) by 10% by 2022. It plans to reach production capacity of 38–39 gigawatt-hours (GWh) by that time. This will be thanks in part to another battery cell production line being installed at Giga Nevada.

“We are targeting a profit margin of around 5% at our Tesla battery business within two to three years,” Umeda also noted.

The Tesla–Panasonic partnership is the longest high-profile partnership Tesla has. I think both companies are in a much better position today than they would have been without their partner. So, from something like a superstitious perspective, I think it’s a positive sign to see the duo partnering further on the next generation of EV battery technology.

Panasonic reported an 11% operating profit in its update for shareholders earlier today.

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