Panasonic Set to Invest $204 Million to Up Lithium-Ion Battery Production

4 years ago by Eric Loveday 18

Panasonic Cells Packed in Old School Tesla Housing.

Panasonic Cells Packed in Old School Tesla Housing.

Tesla Motors has pushed Panasonic beyond its production limits.

In response to demand for lithium-ion battery cells (most of that demand coming directly from Tesla), Panasonic will invest $204 million by March 2014 to increase battery cell production for the automotive sector.

Panasonic will use some of that money to construct an additional cell manufacturing line at its facility in Osaka, Japan.  Additionally, Panasonic will re-fire an idled line at is Osaka site.

Panasonic calls this a “necessary investment.”  For Tesla, these Panasonic cells are necessary and more will certainly be needed when that affordable Gen III Tesla arrives.

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18 responses to "Panasonic Set to Invest $204 Million to Up Lithium-Ion Battery Production"

  1. GeorgeS says:

    I’ll still wager that Tesla will make their own cells by the time gen 3 rolls out.

    1. Aaron says:

      Tesla would have to invest in the infrastructure to make these batteries. Panasonic is increasing their investment by $204 million. How much do you think was their initial investment? How much time would it take for Tesla to make that money back versus buying Panasonic cells?

      TL;DR: Tesla will be buying Panasonic cells for the foreseeable future.

      1. Suprise Cat says:

        Even Tesla would make them self, Tesla would still need to pay large patent fees to Panasonic and other battery technology developers. Battery technology is a huge patent carpet.

        1. benji888578 says:

          “Battery technology is a huge patent carpet.” …this is a big factor in what slows progress too.

          But, wouldn’t it make sense to build bigger cells, like 4X (or more) the size, so that you wouldn’t have to make so many? I would think it would be easier/faster/cheaper?? Last thing Elon Musk said was that, at this point, production is limited by parts supply from manufacturers, …especially one manufacturer.

          1. GSP says:

            Bigger cells will be more likely to have a defect, resulting in a higher scrap rate and more material being scrapped with each bad cell. Tooling for cell manufacturing and formation will also be less cost effective than for smaller cells.

            GSP

    2. Spec says:

      Tesla is busy enough trying to build cars. Batteries are not their forte.

  2. David Murray says:

    I hope this means it will give them enough production capacity so that other manufacturers can get some of these at a cheaper price too.

    1. Brian says:

      Is anyone else using Panasonic cells?

      1. David Murray says:

        I heard the Ford products were using them… but I’m not sure if that is accurate.

        1. Jesse Gurr says:

          They are but its the prismatic type i think. Not the same as Tesla

    2. Spec says:

      Yeah, that is what I am wondering . . . I wonder if any other automakers have signed up with Panasonic to get their batteries for EVs.

      The optimal chemistry for EV batteries has still not be determined and it is still a developing market. I’m not sure if the chemistry used by Tesla/Panasonic is one I like . . . it has nice energy density but I wish it didn’t use the toxic Cobalt. I guess that is fine if good recycling programs are set up.

      The most important metrics for EV batteries are probably cost/KWH and longevity. I think Tesla has pushed for energy density in order to build their huge batteries. That also lets them have a pass on power density since they can draw less power per cell with such a large pack.

      1. GeorgeS says:

        It also gives them a pass on cycle life. With a battery that big you only need 500 cycles. Most people don’t understand that.

  3. kdawg says:

    I’d feel more comfortable with the Panasonic cells if they came out with something other than what looks like cylindrical laptop batteries. Yeah yeah, I know about the density and lack of problems ..so far. But I would still feel more comfortable w/something more “purpose-built” vs. what looks like off the shelf. I’m sure cost would be more… maybe.

    1. Spec says:

      Yeah, I agree with you on this. I can’t see how 7000 little AA sized batteries is the most efficient way to build EV battery packs for cars. That seems kind of crazy. Really crazy.

      But the good news is that shows there is still room to reduce the price of batteries for EVs and thus broaden the market for EVs.

  4. Ocean Railroader says:

    Tesla will easily eat up this new capacity in that Elon Musk said he needs Panasonic to make as many new cells as possible. He also mentioned that he can’t make anymore then 500 cars a week with existing capacity. So if Tesla starts building 800 to 1000 or even 1500 cars a week they will easily munch though all this extra battery making capacity coming on line. In fact I think all this extra battery capacity might be to little to late in that Tesla already wants to ramp up production to 800 to 1000 cars a week by next year and this battery making capacity won’t come on line till late next year. The reason why I say this is that to build a model S you at least 3000 to 5000 cells which is a ton of batteries.

    1. GeorgeS says:

      That’s why I think he will start making his own batteries.

      1. pjwood says:

        But then, again, his own batteries won’t be bid down by competition. The Panasonic cells are close to garden variety, and I wouldn’t be so sure “patents” eat up much of the price, at all. This way, Musk gets to play “Wall Mart”.

  5. Martin T says:

    Looks like Tesla method of making batteries works for them as they continue down the path.
    Custom battery forms – must be more expensive still ….