Panasonic beats forecasts, developing new battery cell for Tesla
From Makiko Yamazaki
TOKYO (Reuters) - Panasonic Corp announced Thursday that it is working on developing a new battery cell for Tesla Inc, based on the U.S. electric vehicle maker's new cell format, as the Japanese company advances its decade-long partnership with Tesla.
Tesla's new battery cell - a larger cylindrical format called the 4680 that can store more energy and is easier to manufacture - is key to achieving the goal of cutting battery costs in half and increasing battery production nearly 100 times by 2030.
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"We have significant expertise in this battery," said Hirokazu Umeda, Panasonic's chief financial officer, at a briefing when the company reported an 11% increase in operating profit for the second quarter, beating analysts' estimates.
"We started doing this right after Tesla's Battery Day (in September) and are preparing to set up a prototype production line in parallel," he added.
Panasonic's decision to work on the new cell for Tesla comes because the brisk sales of Tesla electric vehicles stabilized the profits of their joint battery company in Nevada after several years of production problems and delays at the US partner.
Umeda also said the company has decided to open an additional production line at the Nevada facility next year and increase the facility's total capacity by about 10% to 38 to 39 gigawatt hours (GWh) per year by around 2022.
"We are aiming for a profit margin of around 5% for our Tesla battery business within two to three years," he added.
Panasonic's July through September operating profit increased to 92.8 billion yen ($ 886.34 million) from 83.9 billion yen a year earlier.
Tesla has announced that it will manufacture its own battery cells in several highly automated factories around the world, but will continue to use its existing cell suppliers - Panasonic, LG Chem from South Korea and Contemporary Amperex Technology Co. from China.
With the advanced battery cell design and manufacturing process, Elon Musk, CEO of Tesla, promised to cut battery costs in half in several years and deliver an "affordable" electric car, although experts have questioned how quickly it can be implemented.
(Reporting by Makiko Yamazaki; Editing by Rashmi Aich)
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