Tom Gebhardt, CEO of Panasonic Corp. of North America, said his company is prepared to add a lot more battery production capacity worldwide as electric vehicle demand increases.
The question will be where.
EV batteries are complex to make and delicate to deliver. So far, the industry's batteries are being produced in plants dedicated to nearby customers. Panasonic is Tesla's partner in the world's largest automotive lithium ion battery plant: the $5 billion gigafactory near Reno, Nev., 260 miles from Tesla's assembly plant in Fremont, Calif.
But the EV market is heating up as automakers roll out plans for multiple new vehicles. The question facing battery producers will be how many more plants will have to be built around North America — not just for the added capacity, but to continue minimizing their delicate logistics. Special Correspondent Jim Henry interviewed Gebhardt last month about the new world of battery plants.
Q: The gigafactory is building batteries for Tesla in Nevada. Will Panasonic have to build another gigafactory as more automakers introduce electric vehicles, or will the company use smaller battery plants closer to each customer?
A: We are adding battery factories. And the gigafactory is still evolving. It continues to build out. And we also have expanded facilities in Japan.
But you can see that, in a global vehicle market of 85 million units-plus, the growth of electric vehicles as a percentage of that total means you're going to have to size to that much battery capacity.
Tesla CEO Elon Musk has complained that battery production is limiting Tesla volume.
Tesla is learning today that manufacturing is tough — especially at scale. We get that. Manufacturing is hard. But Musk has clearly said the gigafactory has been sized to what he can sell.
What in particular is so hard about manufacturing batteries?
The interesting thing about batteries is that you're talking about a chemical reaction that is housed in a mechanical device, which is sealed inside a container. So you've got electrical, mechanical and chemical engineers all trying to maximize the output of that cylinder, and they all have different definitions of success.
When you make any change — any change — all these people have to agree. For example, if you have a chemical issue, maybe you need to change the material. To do all that while also manufacturing to scale is tough.
And it's literally a hot environment, right?
With the energy density of these devices, yes. Look what's happened with the Samsung Galaxy and with hoverboards — failure is not a minor event. The failure tolerance is very low, and the demand for perfection is very high. That's why you also see very few manufacturers of batteries. But we can do it, and are doing it.
You can reach Jim Henry at autonews@crain.com