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Panasonic is going to increase the production of batteries for Tesla at Giga Nevada. The company is reportedly accelerating its efforts to ramp up production in response to Tesla's call.

Japanese electronics giant Panasonic is expanding battery production for electric vehicles at its joint venture with Tesla at Giga Nevada. The company has accelerated plans to increase its battery production capacity, responding to the American manufacturer's call, according to a report by Nikkei Asia. Tesla told Panasonic it would buy as many batteries from it as the Japanese company could make, according to a Panasonic executive.

Partially, Tesla is looking to ramp up U.S. battery production as much as possible to take advantage of the Inflation Reduction Act (IRA). Under the IRA, the government will pay a tax credit of $35 per kilowatt-hour for battery cells made in the US. This could drive down the cost of Tesla vehicles. In addition, the company's production is constantly expanding, which means that Tesla constantly needs even more batteries for its cars.

In connection with this expansion, Panasonic Energy will install a 15th production line at Gigafactory Nevada, people familiar with the matter told Nikkei Asia. It is planned that the new line will be put into operation in one or two years. The additional line is estimated to increase the facility's annual production capacity from the current 38 GWh to 39 GWh. The increase should be enough to produce an additional 500,000 to 700,000 Tesla Model 3 vehicles.

The facility is “already crammed,” the same executive said, but “we can add just one more [production line],” according to the report.

Due to increased demand from Tesla, Panasonic has been forced to change its plan for the Kansas facility, the source said. “We were concentrating on Kansas and developing the new [4680] battery, but the IRA turned the tide,” the executive said. “Tesla started saying to prioritize batteries that we can quickly increase in quantity.”

It will be much easier and faster to ramp up production of the 2170 type batteries, as Panasonic is already familiar with the technology. So while Tesla also needs 4680 batteries, the Kanasas facility will start with 2170.

© 2023, Eva Fox | Tesmanian. All rights reserved.

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