Report: Panasonic To Boost Production At Tesla Gigafactory In Nevada

The plan is to increase production efficiency and reliability.

Panasonic Batteries: 2170 cylindrical cells

Mark Kane

By: Mark Kane

Aug 16, 2022 at 8:04am ET

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Panasonic is expected to increase lithium-ion battery cell production for Tesla through improved efficiency and reliability of the production lines.

According to Nikkei, the Japanese company is sending production supervisors from Japan to the Tesla Gigafactory in Nevada to boost the output and meet increased demand.

"By June, dozens of people had been sent to the Gigafactory 1 in Nevada, a joint operation between Tesla and Panasonic, to provide technical assistance and training."

However, let's not get too excited about the scale. The article mentions that the target is a 10% increase... by 2024. That would be barely noticeable, considering how quickly the EV battery business expands.

Panasonic previously reported that its output at the Tesla Gigafactory in Nevada is at about 39 GWh of 2170-type cylindrical cells annually. A 10% increase would be about 4 GWh for a total of 43 GWh annually.

The 10% increase is considered possible if the US plant would meet the production efficiency of Panasonic's Japanese plants. That suggests some untapped potential, rather than progress on a technical level (new battery chemistry or manufacturing process).

2170-type cells are used by Tesla mostly in the Tesla Model 3 and Tesla Model Y, as well as in energy storage systems.

Panasonic is a large corporation that usually moves forward very cautiously, but many think that it's moving too slowly (even Tesla). In recent years, the company slowed down its EV battery investments and has been overtaken by its Chinese and South Korean competitors in terms of volume.

What do you think?

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On the positive side, the battery business has become profitable, the company is working on improved chemistry to increase energy density, is developing all-new 4680-type battery cells with a pilot production in Japan, and prepares to build the first production lines in Japan. The next step will be a massive $4 billion battery plant in Kansas.

Only time will tell whether the strategy of securing profitability and waiting with new investments for the new type of batteries was correct.