Despite a slowdown in electric vehicle (EV) demand, Panasonic, a Japanese battery company, is considering further investment in its De Soto, Kansas, factory in the United States to increase production capacity for the 4680 cylindrical battery, which has five times the energy capacity of existing batteries. LG Energy Solution and Samsung SDI are also gearing up for the mass production of the 4680 battery, setting the stage for a fierce battle for leadership between South Korea and Japan.
According to a report by Nikkei Asia on March 12, Panasonic Energy is contemplating boosting production capacity at its EV battery plant currently under construction in De Soto, Kansas, in the central United States. The company is planning to double its initial investment of US$4 billion (5.23 trillion won) to US$8 billion, despite delays in additional battery factory construction plans due to slowing EV demand and rising construction costs in North America. This move is aimed at producing the advanced 4680 battery, which offers five times the energy capacity of the existing 2170 batteries, with Tesla as a key customer.
Tesla, too, manufactures the 4680 battery but has faced difficulties in mass production, still requiring support from its suppliers. Despite having a supply agreement with LG Energy Solution for the 4680 battery for its Cybertruck, Tesla is seeking further cooperation with Panasonic.
Panasonic and Tesla have maintained a close cooperative relationship, bordering on a honeymoon phase, since their exclusive supply agreement in 2009. The two companies have been closely collaborating on technology development and battery production, currently co-operating the Gigafactory in Nevada in the U.S.
Panasonic plans to decide on the final additional investment by the end of this year. With major automakers like BMW, GM, Ford, and Volvo considering adopting the 4680 battery, this decision is anticipated to have significant implications.
The competition between South Korean and Japanese companies over the production and supply of the 4680 battery is expected to intensify. LG Energy Solution has finalized its mass production schedule for the 4680 battery in August this year, starting production at its Ochang plant in Cheongju, North Chungcheong Province, and plans to use its forthcoming Arizona plant in the U.S. as a production base for cylindrical batteries.
Samsung SDI is preparing to begin mass production of its cylindrical battery, named “46Phi,” by the end of this year, exploring configurations such as 4680, 4695, 46110, and 46120.
An industry insider remarked, “The 4680 battery will be an important benchmark in determining the front-runner in the global battery market. The successful mass production and supply of next-generation 4680 batteries are expected to contribute to the growth of the EV industry, beyond a mere competition between companies.”