Panasonic is investing $700 million to produce Tesla 4680 battery cell by 2023

According to a new report, Panasonic is investing $700 million to produce Tesla’s 4680 battery cell at a factory in Japan by 2023.

Tesla is preparing to start production of its first vehicle using its 4680 battery cell, a new tab-less battery cell in a bigger format with new chemistry unveiled in 2020.

For the first time, the automaker plans to produce its own cells to support its electric vehicle production.

However, Tesla is going to need so many cells that it is also partnering with current battery suppliers to deploy their own production of the new 4680 cell.

Panasonic, Tesla’s oldest battery partner, has tentatively announced that it would be deploying a prototype production line for the new battery cell.

Later, Panasonic’s new CEO, Yuki Kusumi, said that it is prepared to make a “large investment” in producing Tesla’s new battery cell if test production proves successful.

In October 2021, the Japanese manufacturer unveiled its own 4680 cell developed with Tesla.

Now a new report from Nikkei Asia claims today that Panasonic has green-lighted an 80 billion yen ($705 million) investment at its Wakayama factory in Japan to produce the 4680 cell for Tesla.

Panasonic didn’t want to comment on the report and said that it is still focused on its test production line:

We are studying various options for mass production, including a test production line we are establishing this business year. We don’t, however, have anything to announce at this time.

The report said that Panasonic was planning a production output of less than 10 GWh at the plant.

At an average pack size of 60 kWh, that’s enough to produce over 150,000 vehicles per year.

However, it is anticipated that Panasonic could also deploy new production lines for the 4680 cells at other factories, including potential GIgafactory Nevada where the company already produces 2170 cells for Tesla’s Model 3 and Model Y vehicles produced at Fremont factory.

Along with Panasonic, LG, Samsung, and CATL have all also indicated that they aim to produce 4680 cells for Tesla.

Along with its own battery cell production, which is being deployed at Gigafactory Texas, Berlin, and Shanghai, Tesla said that it will buy every battery cell it can from suppliers for the foreseeable future.