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Panasonic sees annual profit with battery cells for Tesla, confirms 4680 test production

Tesla itself has been making profits with the sale of its electric cars and energy products for six quarters in a row, but Panasonic, as the former main supplier of battery cells, is doing less well. In between there were conflicts about the joint battery factory in the US state of Nevada, but they have been over for a while – and now Panasonic has also reported that it had made a profit in the quarter to the end of 2020 and probably also for the entire next financial year to complete profitably in this area. In addition, the Japanese company has confirmed that it will begin test production of the 4680 cells developed by Tesla before April 2022.

Panasonic makes money with Tesla batteries

“In the next fiscal year we want to put an end to the question of whether the business will be profitable or not,” said the Panasonic chief financial officer, according to a report by the news agency Reuters this week with a view to the Tesla partnership. At the same time, the electronics conglomerate increased its profit forecast for the current fiscal year (until the end of March) significantly to 230 billion yen (about 2 billion euros). According to a presentation, the sale of cylindrical batteries for electric cars also contributes to this, i.e. for Tesla. In the quarter just ended, profits had increased “through rationalization and other factors”, so that the entire auto sector was profitable.

According to Reuters, the CFO also confirmed that Panasonic will set up an additional production line in the Gigafactory in Nevada. The new cells in 4680 format, which Tesla presented at its Battery Day in September 2020, are to be produced on this. Shortly afterwards, Panasonic and the newer Tesla suppliers CATL and LG Energy Solutions heard that they were also interested in producing these cells. Tesla CEO Elon Musk, in turn, said they wanted to produce some of them in-house, but would continue to source cells from partners, and more than before.

Start of 4680 production before April 2022

Panasonic was already reported at the end of 2020 that the company would start up a prototype line for the new Tesla format in one of its existing cell factories. At that time there was talk of a start this year, but the location was not disclosed. With the statement by the chief financial officer, it is now clear that Panasonic has opted for the Gigafactory in Nevada – which is obvious because most of its previous cells for Tesla come from there. As the start date for test production on the new 4680 line, the company now only mentions the next financial year, which extends into the first calendar quarter of 2022.

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