Panasonic announced today that it greenlighted a new investment to start production of Tesla’s 4680 battery cell by the end of the fiscal year ending March 2024.

The Japanese manufacturing giant is one of several battery makers looking to produce 4680 cells for Tesla.

Tesla is preparing to start deliveries of its first vehicle using its 4680 battery cell, a new tab-less battery cell in a bigger format with new chemistry unveiled in 2020.

For the first time, the automaker plans to produce its own cells to support its electric vehicle production.

The Model Y produced at Gigafactory Texas is going to be the first vehicle to feature the new cell, which also enables Tesla’s structural battery pack architecture.

However, Tesla is going to need so many cells that it is also partnering with current battery suppliers to deploy their own production of the new 4680 cell.

Panasonic, Tesla’s oldest battery partner, has tentatively announced that it would be deploying a prototype production line for the new battery cell.

Later, Panasonic’s new CEO, Yuki Kusumi, said that it is prepared to make a “large investment” in producing Tesla’s new battery cell if test production proves successful.

In October 2021, the Japanese manufacturer unveiled its own 4680 cell developed with Tesla.

One month ago, it was rumored that Panasonic has greenlighted a $700 million investment to produce the 4680 cell in Japan.

Today, the company has confirmed the announcement without specifying an amount to be invested.

Panasonic wrote in a press release:

“Panasonic Corporation today announced that its Energy Company will establish a production facility at its Wakayama Factory in western Japan to manufacture new, “4680” lithium-ion batteries for electric vehicles (EVs) in order to expand its business globally.”

The company confirmed previous reports that the “production facility” will consist of two new production lines:

“To contribute to the rapid adoption of EVs, Panasonic has been working to enhance its line-up of automotive lithium-ion batteries. Currently, Panasonic is developing a new high-capacity lithium-ion battery, the “4680”, in multiple locations within Japan. The company will progressively develop production capabilities in preparation for the full rollout. Along with structural improvements, two additional production lines as well as utility facilities will be established at the Wakayama Factory, and productivity verification and mass production are set to begin in the fiscal year ending in March 2024.”

Panasonic uses fiscal years ending in March and therefore, the production could start anywhere between March 2023 and March 2024.

Tesla recently reported that it doesn’t plan to be constrained by the limited supply of 4680 cells this year as the chip shortage remains the main bottleneck.

However, the automaker said that next year it expects cell supply to be its biggest growth-limiting factor again.

Ramping up its own production and securing supply from other manufacturers, like Panasonic, is going to be critical.

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