Mazda is likely to adopt the new lithium battery product “4680” that Panasonic Holdings will supply to EV in 2024. Its capacity is about 5 times of the current “2170”. Around EV batteries, there are more and more cases of large car companies and large battery companies jointly setting up new factories. And Panasonic’s main suppliers are still limited to Tesla…
Panasonic Energy, a unit of Panasonic Holdings (HD), and Mazda have announced that they have started discussions on the supply of pure electric vehicle (EV) batteries. Mazda plans to include Panasonic’s batteries in EV models to be launched in the second half of the 2020s. If realized, it will be the first time for Panasonic Holdings to directly supply batteries to large domestic car companies in Japan, which will also be a step forward for Panasonic to solve the problem of getting rid of dependence on the United States Tesla.
Panasonic and Mazda will sign an agreement by 2023 to build a medium – and long-term partnership. Mazda is likely to adopt Panasonic’s new lithium-ion battery “4680” for EV supply starting in 2024. The capacity of “4680” is about five times that of the current “2170”, which helps to extend the EV range.
Panasonic President Yuki Kusumi announced the policy of prioritizing investment in vehicle batteries at the group strategy presentation in May. Plan to increase the current battery capacity of approximately 50 gigawatts by approximately four times to 200 gigawatts by 2030.
Around EV batteries, there are more and more cases of large car companies and large battery companies jointly setting up new factories. In 2022, the US passed the Inflation Reduction Act (IRA), which provides incentives to companies that produce EVs and batteries in North America. According to Bloomberg News agency NEF, $52 billion in EV and battery investment plans have been identified in the United States in about seven months after the passage of the Inflation Reduction Act.
The US Inflation Reduction Act boosted Panasonic Holdings’ operating profit by 80 billion yen in 2023 alone. Matsushita Holdings, which is building battery plants in Japan and the United States, has not yet determined which factory will supply Mazda, but it is likely to be supplied by a plant under construction in Kansas, the United States, which is scheduled to open in 2024.
Regarding the joint construction of a battery factory and talent exchange with Mazda, Panasonic Holdings said on June 21 that “consultations are under way and no possibility is ruled out.” It is possible to decide on the construction site by 2023 and become the third new plant in North America.
According to Japanese Research firm Techno Systems Research, Panasonic Holdings’ global share of the automotive battery market (based on supply capacity in 2022) is 7.7%, ranking fourth. Top of the list is China’s CATL, followed by South Korea’s LG Energy Solutions in third place.
With the growth of the EV market, Germany’s BMW and Germany’s Volkswagen (VW) purchase batteries from the CATL, the United States General Motors (GM) purchase batteries from LG, in the context of the expansion of trading relations between large car companies in Europe and the United States and large battery companies, Panasonic Holding’s main supply object is still limited to Tesla.
In recent years, after Tesla began to purchase batteries from CATL and LG, Panasonic Holdings’ dependence on Tesla on the road to seek growth has become a problem. If it is formally determined to supply batteries to Mazda, it will be an important step in the direction of Panasonic Holdings to solve this problem.
Regarding the “4680” of Panasonic Holdings, there is a view that “large automotive companies in Europe have expressed interest in this battery” (Battery Industry Division of the Japanese Ministry of Economy, Trade and Industry). In addition to Mazda, Panasonic Energy is also in supply talks with a number of major automakers. The aim is to supply more companies and increase the sales of vehicle batteries by 2030 to four times the current level, reaching 2.5 trillion yen.
Mazda sold 1.11 million vehicles worldwide in 2022. It has proposed a plan to make pure electric vehicles account for 25-40% of global sales by 2030. Starting in 2028, the company plans to increase its line-up of pure electric vehicles, before which it will sell both hybrid (HV) and plug-in hybrid (PHV) vehicles.
Including the investment part of its partners, Mazda plans to spend 1.5 trillion yen on electrification of its vehicles by 2030, and is expected to spend about 500 billion yen on batteries. The company has been sourcing pure electric vehicle batteries from AESC Group, a joint venture between Nissan Motor and NEC, and Prime Planet Energy & Solutions (PPES), a joint venture between Panasonic Holdings and Toyota.
By purchasing batteries from Panasonic Holdings with different specifications from PPES, it is easy to choose the most suitable battery for each pure electric vehicle model. In 2017, Mazda signed a capital cooperation agreement with Toyota with the goal of producing complete vehicles in the United States and jointly developing pure electric vehicle technology. Production will begin in 2021-2022 at the joint venture plant in Alabama, USA. The company will also discuss investing in battery production within the company in the future.
Mazda is gearing up to keep up with the shift to pure electric vehicles. If it can cooperate with Panasonic Holdings to ensure battery procurement channels, the general framework of the pure electric vehicle business will be revealed.