In 2020, Toyota and Panasonic formed a joint venture called Prime Planet Energy & Solutions to manufacture advanced lithium-ion prismatic batteries. Toyota controls 51% of the joint venture and Panasonic controls 49%. Last week, PPES said in a statement it expects to lower the cost of batteries by 50% by the end of next year, according to Inside EVs.
The statement did not say how that 50% reduction in cost will be calculated. Is it 50% less than the current cost of manufacturing Panasonic batteries? 50% less than Tesla’s cost of batteries? 50% less than CATL or Samsung or SK Innovation? And how exactly will costs be lowered? The announcement from PPES glosses over those important details. The company has created a helpful YouTube video that paints a glowing picture of the future of mobility. It is chock full of pleasing graphics, easy platitudes, and empty promises.
PPES is led by Hiroaki Koda — a former executive at Toyota — who says the long term goal is reduce costs by as much as 70% by 2025. According to Bloomberg, about 60% of the prismatic lithium-ion battery cost is related to resources like lithium and cobalt, while the remaining 40% falls on development, production and investments. The joint venture is hard at work trying to improve the batteries for electric transportation. “It’s a competitive world,” Koda says. “There’s a certain price level necessary for EVs to spread. If we don’t meet that, we won’t sell.”
The original focus of Prime Planet Energy & Solutions was on making batteries for hybrids, which Toyota likes to call “self charging electric cars.” At present, it has 25% of the global battery market for hybrids. But the focus is now shifting to battery electric cars.
PPES is installing manufacturing lines for prismatic lithium-ion batteries for electric vehicles at its existing domestic facilities in Himeji, Japan. Now here’s where things get interesting. The planned output of the new production line site will be enough to power 80,000 battery electric cars annually.
By contrast, Toyota intends to ramp up production of batteries at its factory in Dalian, China to supply 400,000 hybrid and plug-in hybrid cars annually. In total it will soon have enough batteries for nearly 2 million hybrid cars a year. Let’s see. 80,000 battery electrics versus two million hybrids and plug-in hybrids. Those numbers alone tell you all you need to know about Toyota’s commitment to the EV revolution.
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