Panasonic likely to upgrade Japanese battery cell production plants to 2170 cells by March 2020

The development comes in the wake of Elon Musk, Tesla’s CEO, tweeting that Panasonic has been a constraint on Tesla’s production of the Model 3 since July 2018. Against the installed capacity of 35 GWh at Tesla’s Gigafactory at Nevada, Panasonic has operationalized only 24 GWh.

On Thursday, as per a source familiar with the matter at hand, Panasonic Corp is likely to upgrade one of its battery plants in Japan in order to produce advanced-format battery cells for Tesla Inc if they are required by U.S. electric vehicle (EV) maker.

Currently, Panasonic has an exclusive contract to supply battery cell to Tesla. Panasonic produces them at their joint plant in the U.S. state of Nevada in Tesla’s Gigafactory as well as in two of its plants in Japan.

While the Japanese plants handle cylindrical lithium-ion “18650” cells, that power Tesla’s Model S and Model X cars, the Nevada plant produces the newer, higher-energy density “2170” cells for the mass-market Model 3 sedan.

As per the source, Panasonic’s Japanese production lines will require only minor modifications to switch to the production of 2170 cells.

The source chose the cover of anonymity since the matter was private.

On Wednesday, Japan’s Nikkan Kogyo newspaper reported that Panasonic would perform the upgrade in this financial year ending March 2020.

In a statement, Panasonic said nothing has been decided.

The development comes in the wake of Elon Musk, Tesla’s Chief Executive saying Panasonic had been “a constraint on Model 3 output since July”.

According to Musk’s tweet, Panasonic’s Nevada output is 24 gigawatt-hours (Gwh) as opposed to the planned 35 GWh capacity.

According to Panasonic, although it had completed the installation of its equipment at Nevada for a 35 GWh by the end of March 2019, not all the installed equipment is in full operation.

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