Whatever the battery form factor will be, Panasonic is interested in producing batteries for Tesla.

According to Nikkei, Panasonic is developing a prototype production line to make 4680 cylindrical battery cells, announced by Tesla during Battery Day.

The Japanese company intends to start production in 2021 at an undisclosed existing plant, which suggests the Tesla Gigafactory 1 in Nevada. The investment in this new project will be "tens of millions of dollars."

Panasonic's CFO Hirokazu Umeda revealed in October that the company started to work “immediately” after Tesla announced the new battery type in September.

According to Umeda, the company has decided to add one more production line (probably still 2170) at the Tesla Gigafactory 1 for 10% more battery output (from 35 GWh to 38-39 GWh annually) "by around 2022." The profit margin target for Panasonic's "Tesla battery business" is 5% within 2-3 years.

Details are not clear at this point, but we guess that in the end, Tesla probably will use 4680 cells, manufactured by/or in partnership with other suppliers (including LG Chem), as well as in-house. A lot depends on local demand around the world and a particular chemistry type.