Panasonic Expects To Be Sole Battery Cell Producer At Tesla Giga Factory

3 years ago by Eric Loveday 23

Panasonic 18650 High Capacity Lithium Batteries

Panasonic 18650 High Capacity Lithium Batteries

Panasonic Booth in Tokyo

Panasonic Booth in Tokyo

According to Reuters, Panasonic expects no competing bid from a battery manufacturer fro Tesla’s giga factory:

“…Panasonic, which is already Tesla’s prime supplier for lithium-ion cells but competes with Samsung SDI Co Ltd for auto batteries, did not expect any rival battery makers to put in a competing bid.”

Yoshio Ito, senior managing executive officer and president of Panasonic’s automotive and industrial division is the source for this intel.  According to Ito, Panasonic expects to become the sole cell manufacturer at Tesla’s giga factory.

Ito adds that Panasonic is discussing the details of its investment and construction of the giga factory with Tesla Motors, so it seems like some serious progress is being made.

Panasonic, in being rather tight on cash, is leery, but seems willing to move forward.  Per Reuters:

“…there was a possibility Panasonic would not contribute the majority of the remaining investment even if it became the sole manufacturer at the factory.”

“Ito also said that Panasonic would spend more than 28 billion yen ($275 million) on auto batteries this year, twice its current budget, with the bulk going towards bumping up domestic production of the small lithium-ion batteries Panasonic supplies to Tesla.”

The bulk of Panasonic’s revenue comes from its battery division, so it would seem wise for Panasonic to invest more heavily in that area.  That seems to be Panasonic’s intent:

“Panasonic is aiming to be the No. 1 producer of auto batteries by the year ending March 2019, by when it hopes to be making annual revenue of 450 billion yen ($4.43 billion), up from the 130 billion yen it made in the last business year.”

So, it just seems Panasonic is being cautious, but is moving forward on the Tesla giga factory deal.

Source: Reuters

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23 responses to "Panasonic Expects To Be Sole Battery Cell Producer At Tesla Giga Factory"

  1. Anon says:

    Oooh, the big fish jumped!!!

    Awesome news… And the future of humanity starts to look a bit less grim.

  2. Ocean Railroader says:

    It looks like Tesla is pulling in so many batteries from Panasonic that Panasonic might soon run out of local battery factories to reopen or enlarge. In that 700 Teslas being built a week times 5000 to 8000 batteries could most likely devour up most battery factories out there.

    But what is worrying me is that Panasonic not raising up production fast enough could help harm Tesla.

    As for the Giga factory I will be happy to see it break ground this month if they are really serous about building it and it’s not a dream.

    1. scott franco says:

      Panasonic didn’t want to tie their fortunes to Tesla. The gigafactory thing is about Tesla requiring they tie their fortunes to Tesla.

      1. See Through says:

        There are several issues in Panasonic tying up with Tesla.
        First, as you see above, Panasonic’s battery revenue is much higher that what it sells to Tesla alone. It has many other buyers of its batteries. If Panasonic will be too close to Tesla, what happens to these other buyers? Certainly, Panasonic would not want to loose those customers.
        Second, Panasonic is already expanding its capacity in response to increasing demand. It already has the factories and setup. What Tesla is now offering them, is some piece of undeveloped land and some slides, and asking to get the batteries 30% cheaper. Why would any sane person do that?

        If Tesla wants cheaper batteries, it should make their own – may be buy some really small battery company and develop the technology. Sorry Elon, your ‘free meal’ days are over.

        BTW, this story is at least a week old. Why is it being posted here only now?

        1. kdawg says:

          “Why would any sane person do that?”
          ——
          It’s either join or compete. If Tesla partners with one of Panasonic’s competitors, and they are making batteries at 1/2 the cost, say goodbye to Panasonic.

        2. krona2k says:

          You’re a terrible troll. Many sane companies will cooperate with Tesla on the factory because that’ll be part of the deal to get Tesla business. I don’t really know what game Panasonic is playing but I’d say chances are they’ll commit and it they don’t someone else will.

        3. JakeY says:

          “Why would any sane person do that?”
          Tesla could just partner with one of Panasonic’s competitors (like LG and Samsung) and Panasonic would not only lose Tesla’s existing business, but one of its competitors would get a huge boost in cell capacity (I believe the contract will likely allow any spare cell capacity in the factory to be used by the cell maker).

          Tesla never got a ‘free meal’. Tesla gave Panasonic plenty of profits when buying Panasonic cells (one of the main drivers of profit in Panasonic’s battery division). If Tesla weren’t around, Panasonic’s battery division might have been in as dismal a situation as Sony’s under the intense pressure from Korean competitors.

          Even here, the 30% cost saving goal isn’t talking about cutting into Panasonic’s margins, it’s the savings from drastic vertical integration (from raw materials to logistics to scale).

          1. See Through says:

            You folks should read this article, which says Panasonic will supply 4 times more batteries to Tesla. Given that, there is even less need for another Gigafactory.

            http://www.fastcompany.com/3020895/fast-feed/tesla-splurges-on-enough-panasonic-batteries-to-make-5-times-as-many-cars

            1. JakeY says:

              5x the current target volume (35k per year) is 175k per year. Given the Tesla goal is 500k per year for Gen III, the gigafactory is still necessary.

              Sure, if all Tesla planned to do is continue making only Model S variants, then the supply is enough, but not if they want to make the Gen III.

            2. Mint says:

              Didn’t you just complain above about a week old story? Guess what, troll: You’re posting a link that’s a year old.

              That deal is only enough for 250,000-300,000 cars in total. By the time the Gen 3 launches in 2017, Tesla will have used most of that. They’ll need 1-2 billion cells *per year* from 2018 onwards.

    2. See Through says:

      It’s not a dream; it’s a hoax. There is not much demand left for model S, and Panasonic sees that, but obviously can’t disclose that to the public due to customer relationship.

      Remember, most of the model X orders were places by early 2012 ( just do a search). Since then, a plethora of new EV and PHEV cars have come to compete, and now buyers have many compelling choices when they think green.

      1. kdawg says:

        There are still no ‘affordable’ 200 mile range BEVs. That is what the Gigafactory is about.

        It’s funny how you can sit in your chair and say something is a hoax, then try to pull data from your personal crystal ball about Model S demand.

        1. See Through says:

          “There are still no ‘affordable’ 200 mile range BEVs”
          – Have you see the Denza EV that costs $52K pre-incentives? Just search fo this in this site.

          Are you folks saying, Panasonic execs are nuts to not hand over their battery tech to Tesla and go home?

      2. Jeff D says:

        Gigafactory was never about Model S. It has always been about Gen III. Besides they wouldn’t keep ramping up production if the demand wasn’t there. Also plethora of new EVs and PHEVs you talk about aren’t even in the same class. That would be like saying there will be less demand for a Mercedes or BMW just because Ford or GM comes out with a few new cars.

      3. EdoTesla says:

        Regarding the Model X, the early adopters have all signed up. Others may not feel comfortable putting down a deposit on a car they have not seen.

      4. JakeY says:

        “There is not much demand left for model S”
        Absolutely no evidence of this. Why would they be ramping up production if there was no demand? And why is there still a wait time?

        I bet you are talking about the reports of US demand going down; however, those assume Tesla follows the same structure as other companies (where delivery = sale). However, that’s not the case. The number of Tesla orders is higher than the number of deliveries because of the wait time. The number of US deliveries is not a good indicator of demand for this reason.

        If you look at the SEC filings, worldwide deliveries (6457) were above guidance, North American orders up 10% from the previous quarter, and guidance for worldwide deliveries next quarter is 7500. I don’t see how anyone can look at that and say there’s “not much demand left”.

      5. Mikael says:

        There is not much demand left for the Model S… Hahaha…

        Norway alone could easily buy 1000 a month if they got as many Teslas as they wanted.

        And there are so many markets that are just waking up where demand only will increase.

        There will come a day when it’s the demand that is the limit but we are far from that day yet. And if demand was getting weaker they would have pushed the Model X faster to take some of the burdon of the Model S.

      6. evnow says:

        Do you have any holdings in TSLA ? Since you want to persistently cr*p on every Tesla related story, you should disclose your position.

        I’m long on TSLA, BTW.

      7. Spec9 says:

        Trolly McTroll continues to troll.

        1. vadik says:

          See Through talks common sense, no reason to accuse him or her of trolling.

          If I were Panasonic I would never finance the GF and would think very hard whether I’d build it for someone else’s pile of cash.

  3. Kristof says:

    If they have to much production capacity in the giga factory they can still sell battery packs to car manufacturers that don’t want to invest in their ow battery technology and production.

  4. Greed and Ignorance.

    These are the only reasons I can think of for not using the unlimited resources of the Hydrogen

    in the World’s Oceans. (H2O, Fuel Cell’s).

    At least until we, as a species, can utilize the Sun as well as the Plants do!

    Mike Swendrowski.