Tesla Inc (NASDAQ: TSLA) supplier Panasonic Corporation (OTC: PCRFF) (OTC: PCRFY) will set up a prototype production line to make a new cheaper battery variant for the automaker, Nikkei Asia reported on Sunday.
What Happened: The Japanese company is set to begin producing the new battery prototypes — developed by Tesla— as early as next year, according to Nikkei Asia.
The cost of the new production facilities is reportedly going to run into tens of millions of dollars. The new battery design is half as expensive to make relative to its capacity, as per Nikkei Asia.
Why It Matters: The Elon Musk-led company plans to manufacture the new battery cell — known as 4680 — by itself but experts say it would be difficult for it to handle production by itself.
Panasonic is reportedly expected to forge a future partnership with Tesla to build some of the new batteries.
The electronics giant’s Chief Financial Officer Hirokazu Umeda said in October that it started to work “immediately” after Tesla announced the prototype in September and was “preparing to set up a prototype production line in parallel,” reported Reuters.
Panasonic said in November it was not worried about Tesla buying batteries from rivals or starting its own in-house battery manufacturing.
See Also: Tesla Supplier Panasonic Replaces Elon Musk Supporter Kazuhiro Tsuga As CEO
The company’s United States business head Yasuaki Takamoto expressed confidence that Panasonic’s EV battery business would expand owing to an increase in total volumes of electric vehicles.
Price Action: Tesla shares closed almost 2.4% higher at $661.77 on Thursday and fell 0.27% in the after-hours session. On the same day, Panasonic OTC shares closed 0.22% higher at $11.40.
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