Panasonic Corp is considering upgrading one of its Japanese battery plants to manufacture battery cells of advanced format for Tesla Inc only in case the same would be required by the U.S. electric vehicle (EV) maker, Reuters reported on Thursday, citing a person familiar with the matter.
Panasonic currently is enjoying the monopoly in supplying battery cells to Tesla as its exclusive supplier of battery cells that it has been producing jointly in a Nevada plant, also known as Gigafactory 1, collaborating with the EV maker, as well as at two other Japanese plants of its own.
The Japan-based plants of Panasonic manufacture battery format of cylindrical lithium-ion “18650” cells for Model X and Model S of Tesla, whereas for mass-market of Tesla’s Model 3 sedan, the Nevada plant is producing new, higher energy density and bigger “2170” cells.
Tesla has been using the cylindrical Li-ion 18650 battery cells, a format that is also used in laptops and other electronic devices, in its vehicles for a long time and is among one of the first EV makers using these cylindrical cells in EVs. And until now most of the supply of Panasonic’s Li-ion battery cells came from its Japanese plants.
In case of switching the production lines of those Japanese plants from 18650 cells to 2170 format, there would be a need of making minor modifications only, said the person, who declined to be identified as the matter was private.
The upgrade is possibly be taking place in the fiscal year ending March 2020, according to Wednesday report by a Japanese newspaper, Nikkan Kogyo, but Panasonic in its statement said that nothing has been decided at this time.
The news of switching production lines came after Tesla Chief Executive Elon Musk in his Tweet blamed the Panasonic for holding back production of its best-seller Model 3 sedan.