Panasonic will begin investment into a pilot line to produce Tesla’s 46800 batteries, according to Japanese media Nikkei.
The equipment will be placed at Suminoe factory at Osaka city.
The news is likely to end speculation that Panasonic and Tesla’s relationship was in trouble. However, it is highly likely that LG Energy Solution and CATL will also take part in the production of Tesla’s new battery that will intensify competition going forward.
Panasonic’s investment volume is expected to be around tens of billions of yen.
South Korean battery equipment makers taking part in Tesla’s battery production line at Fremont, California is speculated to have won in total orders around 200 billion won. Panasonic’s order is likely similar to this year.
Panasonic had solidified its position as the major battery supplier to Tesla up to last year when LG and CATL also joined the supply chain. There has also been worries that the Japanese company may see its battery supply to Tesla reduced after the latter announced in September that it was producing its own batteries.
Tesla also needs Panasonic. The Japanese company accounts for 80% of the production goal of the US electric car giant’s plan to produce 100GWh of batteries in 2022 in Berlin and Texas. Tesla is aiming to have battery production capacity of 3TWh in 2030, which it likely can’t do alone.
Panasonic marked its first profit from its battery supply to Tesla in the third quarter of 2020 (its October-December period fro its 2019 fiscal year) after ten years of collaboration.
Tesla will likely rely on Panasonic for the next five years as it will take time for the US company to secure productivity in its own battery production.