Nikkei Asia reports that Panasonic will invest $700 million to expand its battery factory in Wakayama prefecture, Japan, and bring in new equipment to manufacture the new 4680 battery cells developed by Tesla. When completed, the factory will be capable of producing about 10 gigawatt-hours per year of the new batteries, enough to power about 150,000 electric vehicles. That is about 20% of the company’s total battery manufacturing capacity from its factories in Japan, the US, and other countries.

The 4680 batteries cost 10% to 20% less to manufacture and have about a 15% higher energy density than the lithium-ion batteries that Tesla has been using to date. The extra energy density means a Tesla Model S would have a range of 750 kilometers, versus 650 kilometers today. Panasonic says the first batteries should be produced early next year.

Competition

Other Battery companies are plowing billions of dollars into new manufacturing facilities. It may be that one day someone will come up with a new battery technology that doubles energy density but costs half as much to manufacture. Until that day arrives, however, a 15% improvement in energy density at a 20% reduction in cost is absolutely amazing.