Subaru Corporation and Panasonic Energy announced that they have started talks to build a medium- to long-term partnership to meet demand for battery electric vehicles and automotive batteries.

According to the brief press release, the two partners will talk about Panasonic's next-generation automotive cylindrical lithium-ion batteries, which Subaru would use in its upcoming all-electric models in the second half of the this decade. Specifically, the batteries would be used at the upcoming, dedicated BEV plant, which will be constructed in Gunma, Japan.

"Subaru and Panasonic Energy will hold discussions with a view to Panasonic Energy supplying Subaru with next-generation automotive cylindrical lithium-ion batteries, and Subaru installing batteries purchased from Panasonic Energy in BEVs to be produced from the latter half of the 2020s at its sites, including a dedicated BEV plant scheduled to be constructed in Gunma, Japan."

There are no details related to the "next-generation automotive cylindrical lithium-ion batteries," but as we understand, it might mean the upcoming 4680-type cylindrical cell format (or a similar one with a different height) and the latest lithium-ion chemistry at the time of introduction.

Overall, the agreement - the start of talks, timeframe, and cylindrical cell format - basically mirrors the one between Mazda and Panasonic, which was announced in June.

Some might even think that maybe Panasonic is trying to build a coalition of Japanese carmakers to introduce the new battery type (4680-type) on a bigger scale in Japan. Mazda and Subaru are not particularly big manufacturers, so Panasonic potentially is trying to secure orders from several smaller brands, before building a large battery plant - necessary to achieve the effect of scale and remain competitive. That's just a guess.

We will see whether there will be more similar deals in the future, but overall, it's a good sign indicating some new investments and expansion.

Tesla also is a potential customer for Panasonic 4680-type cylindrical cells, but due to the Inflation Reduction Act of 2022 (IRA), eventual volume production for Tesla, most likely, will be located in North America. Logistics is another reason.

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