TOKYO—Panasonic on Monday unveiled a new large prototype battery designed to help Tesla Inc. lower electric vehicle (EV) production costs, in a move the Japanese company’s battery chief said would deepen business ties with its key U.S. customer.
During a media roundtable where Kazuo Tadanobu showed the battery that is around five times the size of those currently used by Tesla, he also said Panasonic had no plans to make cheaper Lithium Iron Phosphate (LFP) batteries for more affordable EVs.
Tesla’s decision to diversify battery suppliers to companies such as South Korea’s LG Energy Solution, and China’s Contemporary Amperex Technology Co (CATL), and Panasonic’s sale of Tesla shares had raised questions over the future of their decade-long partnership.
But as the sole manufacturer of the 4680 format (46 millimeters wide and 80 millimeters tall) battery, Panasonic should remain a critical link in the EV maker’s supply chain, at least for its pricier models.
“We have developed this because of the strong desire of the other party, and we think this can only lead to stronger ties,” Tadanobu said.
He did not say when Panasonic, which operates a plant in Nevada that supplies Tesla, would begin full-scale production.
Panasonic’s decision to avoid LFP power packs means Tesla is buying those from CATL for some China-made Model 3 and Model Ys, and entry-level Model 3s in the United States.
LFP batteries, 95 percent of which are made in China, are considered cheaper and safer than nickel-based batteries, but have less energy density and need to be recharged more often. Panasonic’s auto batteries are nickel-cobalt-aluminum (NCA).
Tesla wants the cheaper cobalt-free Lithium Iron Phosphate (LFP) batteries for its standard-range electric vehicles but needs to figure out how to overcome political tensions to get a Chinese partner to build the iron-based batteries near its U.S. factories.
Tadanobu declined to say whether Apple had approached Panasonic about buying EV batteries.
