Tesla battery supplier “Panasonic”, the Japanese electronics giant, plans to raise production capacity by 10% in 2021, which is expected to boost the battery production for Tesla, with a massive investment of over $100 million.
The relationship between Tesla and Panasonic has been a rocking one since Panasonic struck a deal in 2016 to jointly produce solar cells at Tesla’s “Gigafactory 2” plant in Buffalo, N.Y.
This latest investment is expected to add another production line to Gigafactory 1, which already runs on 13 production likes. Adding one more line is expected to increase the battery production capacity by a whopping 10% (about 39 GWh per year. according to Nikkei.
Panasonic has been Tesla’s most important battery supplier, which based on a recent agreement should last until at least 2023… In 2010, Panasonic invested $30 million in Tesla to deepen the partnership and foster the growth of the electric vehicle industry. Panasonic makes the 2170 cells at Gigafactory 1, which Tesla then uses to make battery packs for the Model 3. The 2170 cells are also used in Tesla’s newest vehicle, the Model Y.
Tesla revealed in January 2020, that it entered into a partnership with South Korea’s LG Chem Ltd and China’s CATL for the supply of batteries used in its electric cars.
Until now, Tesla currently buy cells from Panasonic made in Japan for Model S and Model X, as well as cells made by Panasonic at Tesla’s Gigafactory 1 in Nevada for Model 3. The automaker used those cells, which they help design, to make their modules and battery packs, but they have never produced their cells.
The latest Panasonic planned investment will surely easy the huge tension that started in 2019 between Tesla and Panasonic. This is the first capacity expansion at Gigafactory since it opened in 2017. Panasonic is also upgrading the batteries being produced at Gigafactory, raising each battery’s storage capacity by 5%, starting in September. Nikkei reports.