Tesla-battery maker Panasonic may add 4680 battery capacity to Kansas plant
Tesla battery supplier Panasonic Energy is considering pouring new investments potentially up to $4 billion in its De Soto, Kansas, plant to produce 4680 battery cells for the Tesla Cybertruck and Tesla’s next-gen vehicles.
Sources with “direct knowledge of the matter” told Nikkei Asia that the Japanese EV battery maker is considering adding production capacity beyond what is already planned for its new plant.
The plan, dubbed internally as Phase 3, includes building additional production lines at the plant, already costing Panasonic $4 billion, currently under construction. Tesla, its main customer, jointly owns a factory with Panasonic in Nevada.
“No final decision has been made,” the source said, adding that “multiple factors” need to be considered before a decision is made. But the source did say that Panasonic is eyeing new capacity to make a larger, more voluminous 4680 battery, a cylindrical lithium-ion battery boasting an energy capacity five times greater than 2170 batteries.
Tesla and South Korea’s LG Energy Solution are developing 4680 batteries, but Panasonic claims it leads the charge in the technology at this stage.
A decision on the plan is expected to come at the end of the year, as the battery maker is still evaluating the production efficiency of the 4680, which it is testing at its factory in Wakayama, Japan.
Panasonic already plans to build 2170-type cells for EVs in De Soto, its second plant in North America. In 2022, it was expected that the factory would be designated for 4680-type cylindrical battery cells for Tesla’s next-gen models, but Panasonic delayed that project.
Back in January, Panasonic said that the Kansas plant will take its annual battery capacity to 88 GWh a year, with plans to raise that to 200 GWh by early 2031.
Panasonic CTO Shoichiro Watanabe recently told Bloomberg in an interview that the company will deliver on its promise to “quadruple production capacity by the 2030 fiscal year.” And to make that happen, he said the company won’t need to rely on building new factories or pouring large investments into production plans. Rather, “we will expand battery capacity and improve productivity at the same time,” Watanabe said.
Panasonic, whose main US customer is Tesla, produces some 10% of the batteries found in electric vehicles around the world. The company plans to start producing a revised version of its 2170-type cylindrical battery cells, which Tesla uses in its Model 3 and Model Y cars, and increase its battery production output by 10%. Panasonic has also been working to increase the energy density of the 2170 cell, with the company saying that the new improvements could help reduce the overall cost of an EV.
However, the Wall Street Journal reported recently that Panasonic had already spent a large portion of its investment on the plant due to rising construction costs in the US.
Mitsutaka Fujita, a researcher at Techno Systems Research, told Nikkei Asia that Panasonic’s plan reflects Tesla’s “steady demand,” adding “that Tesla “is making a decent profit, even after its price cuts,” especially compared to legacy automakers, which are leaning on hybrids and ICE to make up for “losses in their EV business,” the report said.
Fujita also added that Tesla “desperately” wants more 4680 batteries, presumably for its Cybertruck, Semi truck, and Roadster, the report said, and that the automaker’s own battery production isn’t going as smoothly as planned.
Other automakers are using large-volume cylindrical cells with a diameter of 46 mm, but they use a different format. BMW is also using cylindrical cells with a diameter of more than 80mm in its upcoming Neue Klasse vehicles.
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EV sales kept up their momentum in December 2024, with incentives playing a big role, according to the latest Cox Automotive’s Kelley Blue Book report.
December’s strong EV sales saw an average transaction price (ATP) of $55,544, which helped push the industry-wide ATP higher, according to Kelley Blue Book. The December ATP for an EV was higher year-over-year by 0.8%, slightly below the industry average, and higher month-over-month by 1.1%. Tesla ATPs were higher year-over-year by 10.5%.
Incentives for EVs remained elevated in December, although they were slightly lower month-over-month at 14.3% of ATP, down from 14.7% in November.
EV incentives were higher by an impressive 41% year-over-year and have been above 12% of ATP for six consecutive months. Strong sales incentives, which averaged more than $6,700 per sale in 2024, were one reason EV sales surpassed 1.3 million units last year, according to Cox Automotive, a new record for volume and share.
(My colleague Jameson Dow reported yesterday, “In 2024, the world sold 3.5 million more EVs than it did in the previous year … This increase is larger than the 3.2 million increase in EV sales from the previous year – meaning that EV sales aren’t just up, but that the rate of growth is itself increasing.”)
Kelley Blue Book estimated that in December, approximately 84,000 vehicles – or 5.6% of total sales – transacted at prices higher than $80,000 – the highest volume ever. KBB lumps gas cars and EVs together into this luxury vehicle category, so this is where Tesla Cybertruck is slotted.
However, Tesla bundles sales figures of Cybertruck with Model S, Model X, and Tesla Semi(!) into a category it calls “other models,” so we don’t know for sure exactly how many Cybertrucks Tesla sold in Q4, much less in December. However, Electrek‘s Fred Lambert estimates between 9,000 and 12,000 Cybertrucks were sold in Q4, and that’s not a stellar sales figure.
What will January bring when it comes to EV ATPs? What about tax credits? Check back in a month and I’ll fill you in.
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Tesla is now claiming that Cybertruck was the ‘best-selling electric pickup in US’ last year despite not even reporting the number of deliveries.
There’s a lot of context needed here.
As we often highlighted, Tesla is sadly one of, if not the most, opaque automakers regarding sales reports.
Tesla doesn’t break down sales per model or even region.
For comparison, here’s Ford’s Q4 2024 sales report compared to Tesla’s:
You could argue that Tesla has fewer models than Ford, and that’s true, but Tesla’s report literally has two lines despite having six different models.
There’s no reason not to offer a complete breakdown like all other automakers other than trying to make it hard to verify the health of each vehicle program.
This has been the case with the Cybertruck. Tesla is bundling its Cybertruck deliveries with Model S, Model X, and Tesla Semi deliveries.
Despite this lack of disclosure, Tesla has been able to claim that the Cybertruck has become “the best-selling electric pickup truck” in the US in 2024:
It very well might be true. Ford disclosed 33,510 F-150 Lightning truck deliveries in the US in 2024 while most estimates are putting Cybertruck deliveries at around 40,000 units.
Those are global deliveries, but Tesla only delivered the Cybertruck in the US, Canada, and Mexico in 2024, and most of the deliveries are believed to be in the US.
However, there’s essential context needed here, as we highlighted in our recent ‘Tesla Cybertruck sales are disastrous‘ article.
First off, Tesla had a backlog of over 1 million reservations for the Cybertruck that it has been building since 2019. This led many to believe Tesla already had years of demand baked in for the truck and that production would be the constraint.
However, based on estimates, again, because Tesla refuses to disclose the data, Cybertruck deliveries were either flat or down in Q4 versus Q3 despite Tesla introducing cheaper versions of the vehicle and ramping up production.
Again, that’s after just about 40,000 deliveries.
Furthermore, with almost 11,000 deliveries in Q4 in the US, Ford more likely than not outsold Cybertruck with the F-150 Lightning in Q4.
Electrek’s Take
Tesla is in damage control here. There’s no doubt that it is having issues selling the Cybertruck.
Inventory is full of Cybertrucks and Tesla is now discounting them and offering free lifetime Supercharging.
Tesla is great at ramping up production, and it’s clear the Cybertruck is not production-constrained anymore. It is demand-constrained despite having over 1 million reservations.
Again, those reservations were made before Tesla unveiled the production version, which happened to have less range and cost significantly more.
The upcoming cheaper single motor version should help with demand, but I have serious doubts Tesla can ramp this program up to more than 100,000 units in the US.
As a reminder, Tesla installed a production capacity of 250,000 units annually and Musk said he could see Tesla selling 500,000 Cybertrucks per year.
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