Panasonic to jump-start US battery cell output for Tesla

Panasonic will begin mass-producing components for electric-car batteries ahead of schedule at an American factory it is building with Tesla Motors, responding to brisk demand for a forthcoming sedan from the U.S. automaker.

The duo had initially said the lithium-ion-battery plant in the state of Nevada would be up and running sometime in fiscal 2016 — a time frame taken to mean early 2017. The plant is now set to open this July, with power cell production to begin in November. Tesla is thought to have called on Panasonic to compress its timeline after receiving a large number of preorders for the Model 3 sedan, due out next year.

Investments to expand output will also be sped up. Panasonic was initially to pour up to $1.6 billion into the plant in eight installments. But this could change, as the company “would like to avoid delays in [Tesla’s] auto production caused by an insufficient battery supply,” an executive at the Japanese electronics maker said.

Panasonic is also growing electric-car operations in China, the world’s largest market, by partnering with Beijing Automotive Group (BAIC) to make electric compressors for air conditioners. The automaker sold around 2.5 million new vehicles there in 2015, putting it at fifth place in the country’s auto industry. BAIC’s roots are in parts production, though it has made automobiles since 1958. The company now builds such vehicles as luxury cars in partnership with Germany’s Daimler and South Korea’s Hyundai Motor and is stepping up involvement in electric cars and other environmentally friendly autos.

Panasonic is leaning on its ties to BAIC in an effort to grow Chinese operations related to electric vehicles. Cooperation on other products is to be discussed going forward.

Sales from Panasonic’s automotive operations came to around 1.3 trillion yen ($12.4 billion) in the year ended March 31. The plan is to lift the figure to 2 billion in fiscal 2018, transforming electric vehicles into a key driver of earnings.

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