Subaru And Panasonic's Cylindrical EV Battery Deal Is Taking Shape

The two partners announced a basic cooperative agreement.

Subaru Panasonic

Mark Kane

By: Mark Kane

Mar 20, 2024 at 12:00pm ET

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After months of talks about a medium- to long-term supply partnership related to automotive batteries, Subaru and Panasonic Energy have signed what they call "a basic cooperative agreement." The deal covers the supply of cylindrical automotive lithium-ion batteries for Subaru's further all-electric car models.

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Subaru EV sales targets

In 2023, Subaru sold 8,872 all-electric cars in the U.S. However, within several years, the company would like to increase that to 400,000 units (2028), which is expected to represent about half of the volume.

Discussion on the topic started in July 2023. At the time it became clear that Subaru was interested in Panasonic's latest high-capacity cylindrical batteries—potentially the 4680-type (a diameter of 46 mm and height of 80 mm) or similar (46xx), rather than prismatic or laminated formats. Panasonic intends to launch the first 4680-type batteries in April-September 2024.

Today, Subaru's only all-electric car model on the market—Subaru Solterra—is equipped with prismatic battery cells supplied by CATL for a 72.8-kilowatt-hour battery. The car itself is also made by Toyota, which speaks to Subaru's latecomer status in the EV world.

In the future, the battery systems might be significantly different than today because the manufacturers are aware that they have to reduce costs, improve energy density, and potentially make the batteries a structural part of the vehicle.

Panasonic is preparing to meet the requirements of the next-generation all-electric vehicles and engages in talks with automakers about what they need before triggering multi-billion dollar investments. Besides Subaru, a similar discussion was established with Mazda. Of course, Panasonic is also a major battery supplier for Tesla and the company expects to produce 4680-type batteries for the Texas-based automaker.

The recent basic agreement between Subaru and Panasonic most likely includes some interesting targets, but as of today, no details have been shared: "Details regarding specific projects considered for collaboration will be communicated at the appropriate time."

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We can only connect the dots about Subaru's EV plans, including volume sales in the U.S., with strict requirements for local EV battery production in North America and Panasonic's plan to expand battery manufacturing capacity in the U.S. Let's recall the main points from Subaru's global electrification plan:

BEV share: 50% by 2030
(about 600,000 units out of an expected 1.2 million total)
Lineup: 8 models, including four crossovers/SUVs by the end of 2026
Some models will be produced in Japan, some in the US
U.S. target: 400,000 BEV sales by 2028 (about half of the total volume)

If Subaru can pull this off, it will go from being almost a non-entity in the EV space to one with many more electric offerings for future customers.

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