Panasonic plans to increase battery production at Tesla’s Gigafactory 1 and other plants, says report

Panasonic is reportedly putting in place a ~$800 million plan to increase production across all its battery factories, including through its partnership with Tesla at Gigafactory 1 in Nevada.

Earlier this year, the Japanese electronics giant already announced an expansion of its  “prismatic automotive lithium-ion battery” production at its Himeji factory in Japan.

Now a report from Nikkei citing an unnamed Panasonic executive suggests that they are expanding at most of their factories, including Gigafactory 1:

“Panasonic, the world’s biggest supplier of lithium batteries for cars, will simultaneously increase production in Japan, China and the U.S. as it looks to ride an accelerating global shift to electric vehicles. Investments in additional capacity at all three production bases could reach 100 billion yen ($879 million).”

Panasonic already has 5 factories producing li-ion batteries in Japan with their biggest program being battery cells for Tesla’s Model S and Model X. The company also manufactures battery cells at Tesla’s Gigafactory 1 in Nevada for the Model 3 program and Tesla’s stationary energy storage products.

At the Gigafactory 1 alone, they were aiming for a record 35 GWh of battery cell capacity in 2018 and that could go up to 105 GWh of annual capacity by 2020, according to Tesla.

The Japanese firm also added a battery factory in China earlier this year to support local demand. This plant is getting a second production line, according to the report.

They quoted a senior Panasonic executive:

“There have been a lot of battery production requests from automakers, but we’ll only do what’s profitable. We’ll also wait to see how orders look before building new production lines.”

Panasonic invested a lot in its battery production at the Tesla Gigafactory 1. They are currently losing money, but they expect to quickly turn to profit.

Earlier this year, Hirokazu Umeda, Panasonic’s Chief Financial Officer, said about the production at Gigafactory 1:

“For battery cells for the Model 3, costs outweighed profit in the first quarter. As production accelerates towards next year, we expect the business to contribute profit.”

Thanks to its partnership with Tesla, which is the biggest battery consumer on the planet, Panasonic keeps beating records in automotive battery supply.

But competition is increasing from the likes of LG Chem, Samsung SDI, and new giants emerging from China.

The competition is undoubtedly increasing as the auto industry’s transition to electric propulsion is seen as an unprecedented opportunity for battery suppliers.

It will certainly be interesting to see which companies will emerge as leaders as the volumes start to increase with electric vehicle production.

Featured Image: Tesla Gigafactory 1: new aerial shots and drone video – pictures by Chris Murphy