Tesla battery supplier Panasonic is first to start 4680 battery production for more affordable EVs

Panasonic's 4680 battery manufacturing delays seem to be behind it, and the company just became the first Tesla supplier to announce mass production of 4680 cells.

Back in 2022, Panasonic promised that it will give top priority to Tesla as a customer once it starts making 4680 batteries. Tesla currently uses all the 4680 cells it can produce to ramp up production of the Cybertruck, so any alternative supplier could help it introduce such batteries to more of its vehicles.

During Tesla's annual stockholder event, Elon Musk mentioned that if it can't lower the 4680 battery manufacturing costs to those of its suppliers like LG and Panasonic by the end of the year, it might abandon their production altogether.

Since then, however, it announced the start of mass 4680 cell production with the cheaper dry electrode method, so it remains to be heard if it has been able to achieve cost parity with Panasonic’s 4680 cells.

Panasonic didn't specify if it will use its own take on the dry cathode method for the mass 4680 battery production. The CEO of Panasonic Energy Kazuo Tadanobu, however, mentioned that its 4680 batteries will "contribute to the spread of affordable EVs."

The 4680, a revolutionary cell format of cylindrical lithium-ion batteries for electric vehicles (EVs), offers substantial improvements over the conventional 2170 cells. These new cells possess five times the capacity of the 2170 cell. This not only extends the driving range of EVs, but also reduces the number of cells required for the same battery pack capacity. This results in a more efficient battery pack assembly process and ultimately lowers the cost of EVs, making them more affordable to a wider market.

The 4680 cells are larger than the typical 2170 ones that Tesla uses, and can be made much cheaper, at least in theory. Their sheer size requires fewer welding points and results in better volumetric density as they can be used as a structural component in a battery pack.Panasonic says that it "pioneered a mass production method for high-performance 4680 cells, setting a benchmark in the industry," but it seems to only be referring to the cost savings inherent in the structural battery packaging, rather than dry electrodes.

The dry electrode production method, however, leads to further cost reduction because manufacturers can avoid costly wet coating with toxic solvents and the subsequent baking, which require much larger and more energy-intensive facilities.

Panasonic is building a $4 billion battery factory in Kansas to supply Tesla and score tax credits, but for now the 4680 cells will be made in Wakayama, as in Japan Panasonic has customers like Mazda lining up for those batteries, too.

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