Lithium Battery Output Hard to Increase, Tesla and Panasonic End Joint Solar Cell Production

The lithium battery business of Panasonic is doing better and better as Tesla sells around the world. Panasonic was once a long-term production partner of Tesla's lithium batteries and was the sole lithium battery supplier at the US electric vehicle plant. However, the relationship between the two companies has cooled in the past year.

On February 26, according to foreign media reports, the two companies will abandon their partnership to produce solar cells as production at Gigafactory 2 plant in La Buffalo, upstate New York, is struggling to increase production.

It is understood the two companies plan to continue to cooperate on electric vehicle batteries, but the above decision may have a negative impact on their cooperation.

As early as 2016, the two companies announced their cooperation in solar cell production. Panasonic covered part of the equipment costs of the Gigafactory 2 plant. However, its solar cells are also used in Japan and supplied to other suppliers.

In 2017, the core components of Tesla's solar panels began production at the Gigafactory 2 plant. Initially, batteries made by Panasonic should be used for the company's solar roof. However, the batteries cannot meet the company's requirements for cost and efficiency.

In 2019, Tesla launched its third-generation Solar Roof V3, which uses Chinese-made batteries, and the price of the entire system has plummeted by 40 percent by optimizing the product and installing the process faster.

As Tesla's solar roof uses cheaper Chinese batteries, production at the Gigafactory 2 plant in La Buffalo has fallen further. Therefore, Panasonic intends to cut costs by shutting down idle production line capacity and abandoning the partnership to produce solar cells.

Besides, the two are moving further along with electric car batteries. Although Panasonic is still producing lithium batteries for its Fremont plant in California.

However, Panasonic also announced that it will no longer increase production capacity for the lithium battery plant in Reno, Nevada, largely due to insufficient demand for electric vehicles. At the same time, it would not build a new battery plant in China for the Shanghai plant.

On the other hand, Tesla has increased its battery supply capacity by expanding its circle of friends. To meet the lithium battery requirements of the Shanghai plant, the company has signed agreements with South Korea's LG Chemical Company and Ningde Times to make them suppliers in the Shanghai plant.

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