Panasonic Boosting EV Battery Production for Tesla by 10 Percent: Report

A Panasonic Corp.'s lithium-ion battery, which is part of Tesla Motor Inc.'s Model S and Model X battery packs, is pictured with Tesla Motors logo at the Panasonic Center in Tokyo, on Nov. 19, 2013. Yuya Shino/Reuters

Panasonic Holdings is set to increase the production of electric vehicle batteries at Tesla Gigafactory Nevada by roughly 10 percent by 2024, according to reports.

Nikkei Asia reports that Panasonic is looking to meet increased battery demand by optimizing the Nevada factory and sending production supervisors from Japan to the U.S. factory, which is a joint operation between Tesla and Panasonic.

Panasonic announced in July that it would be building a second U.S.-based battery manufacturing facility in Kansas, and the planned project is expected to create up to 4,000 new jobs and result in an investment of up to $4 billion.

That factory, however, is not expected to be fully operational until 2024 at the earliest.

In the meantime, the Japanese battery maker is sending supervisors to the Nevada factory to provide technical assistance and training in an effort to meet Tesla’s increasing battery demand, according to the report.

Dozens of staff from Panasonic Japan had already reportedly been deployed to the Nevada factory in June.

“Their task is to reduce equipment problems and boost production by approximately 10 percent—the equivalent of about one production line,” the report states. “The plant’s eventual production capacity is expected to be about 43 gigawatt-hours per year.”

The Nevada factory currently produces nearly 40GWh of EV batteries annually.

Panasonic will produce more cylindrical 2170 cell batteries, which are used in the electric vehicle maker’s flagship Model 3 car and Model Y vehicle.

Steady Supply of 2170 Cell Batteries

Tesla CEO Elon Musk told employees during the company’s second-quarter 2022 earnings call that Tesla had enough supply of 2170 cells to “satisfy all vehicle production for the remainder of the year.”

“So we’re not dependent on 4680. [The] 4680 [cell] will be important next year, but it is not important for this year,” Musk said

Panasonic has been supplying Tesla with batteries for years, and is the sole maker of Tesla’s more advanced battery. The company already produces batteries at its Osaka plant in the Kansai region of Honshu in Japan.

Electric vehicles are significantly more expensive to make compared with conventional vehicles due to the raw materials such as nickel, cobalt, and lithium that are needed in the battery, meaning those higher costs are passed on to customers.

Currently, China is the largest battery manufacturer in the world, with more than half of all lithium, cobalt, and graphite processing and refining capacity located in the country.

A recent survey by Consumer Reports found that 52 percent of Americans said that the costs of buying and maintaining an electric vehicle are too expensive.

Still, Panasonic hopes to reach the level of electric vehicle batteries made in its domestic factories by sending production supervisors to the Nevada plant, according to the report.