Panasonic and Tesla, Toyota stage triangular relationship, power battery field battle continues

Panasonic, the power battery supplier with which Tesla has partnered for years, is taking new action as It announced it will include the Ninder era as a power battery supplier. Toyota motor ingress with Panasonic to produce power batteries for electric cars,media reported recently. At present, the power battery industry is highly competitive, whether it is Japan and South Korea power battery enterprises or a domestic single Ningde era, there are many partners, and joint ventures have become an important form of power battery enterprises and car companies cooperation.

Panasonic joins toyota

Panasonic’s new joint venture with Toyota, named Taixing Energy Solutions Co., Ltd., is scheduled to be established on April 1, 2020 and is headquartered in Tokyo, Japan. Toyota owns 51 per cent, Panasonic 49 per cent and employs about 5,100 people (including 2,400 chinese subsidiaries).

As early as January 2019, the two sides signed a business merger contract and joint venture contract for the establishment of a new company with the automotive square battery business, and actively prepared for cooperation. The joint venture’s business scope is the development, manufacture and sale of in-vehicle large-capacity/high-output power square lithium-ion batteries, the development, manufacture and sale of in-vehicle all-solid-state batteries, and, in addition to the above-mentioned business, the development, manufacture and sale of the next generation of in-vehicle batteries. Panasonic said its battery joint venture with Toyota Motor Corp. would increase battery production capacity in Japan and China. In addition to Toyota, the joint venture will also supply batteries to Mazda, Daisafa and Subaru in the future. At the same time, the joint venture’s increased production capacity in China will also compete with local Chinese companies.

Toyota believes that the establishment of a new joint venture will help it achieve its goal of electrification. Toyota aims to sell more than 5.5 million electric vehicles worldwide by 2030. Among them, the annual sales of pure electric vehicles and hydrogen fuel cell vehicles should reach 1 million units.

Notably, Panasonic was Tesla’s sole power battery supplier and has been working together for a decade. Hirokazu Umeda, Panasonic’s chief financial officer, said recently that losses at the company’s Nevada-based battery plant with Tesla had been made up because rising production had reduced raw material costs. But there has been friction between the two sides as demand for Tesla has grown. Tesla has accused Panasonic of running out of capacity to limit Production of the Model 3, while Panasonic has complained about the long-term losses at its joint venture’ Nevada superplant and Tesla’s continued price pressure. Panasonic’s chief executive, Yoshihito Tsukiji, has said publicly that Panasonic has underestimated the risks of working with Tesla and is struggling to make a profit from its existing battery partnership with Tesla, which has no plans to build a new battery plant in China for Tesla. Just a few days ago, the Ninder Times announced that it had signed a cooperation agreement with Tesla to supply lithium-ion powered battery products to Tesla in the future.

Panasonic has partnered with Tesla to develop cylindrical lithium-ion batteries, while a joint venture with Toyota produces a flat-powered battery. This means that Panasonic not only “untied” Tesla, but also has new options on the technical route. Zhang Qiang, an independent analyst, believes that the technical standards and principles used in square and cylindrical batteries are quite different, compared to the longer-stocked cylindrical batteries, square battery packs in a large number of battery monomers brought about by the current control and other safety aspects. In addition, the current square battery still accounts for the majority of the market share.

“Despite the cost advantages of Chinese batteries, Panasonic has a technical and cost advantage over Korean-powered batteries. However, Panasonic is under pressure as the power battery industry grows rapidly, given its previous over-reliance on Tesla and fewer partners. In particular, Tesla’s domestic choice of LG Chemical and Ningde era as suppliers, Panasonic’s position is to some extent challenged, Panasonic and Toyota joint venture is also intended to expand market share, reduce risk. “A power battery industry source told reporters. Previously, Panasonic’s installed capacity was the number one in the global global sales rankings of ball-powered battery companies, but with the rapid expansion of the Ningde era, Panasonic has been surpassed by the Ningde era in the past two years.

Panasonic and Tesla, Toyota stage triangular relationship, power battery field battle continues

Behind the wave of joint ventures

In addition to Toyota’s tie-up with Panasonic, French battery companies Saft and PSA Group have officially announced the creation of a joint venture, Automotive Cell Company (ACC), to develop and produce power batteries and to set up a core plant in France and Germany.

In recent years, with the development of new energy vehicles and the lack of high-quality production capacity of power batteries, some auto plants began to build their own battery plants. But BYD’s president, Wang Chuanfu, has previously said that a power-battery plant that meets the demand for the same number of new energy vehicles costs about twice as much as the plant and takes longer to build. As a result, more car companies have started a wave of joint ventures with power battery companies.

In addition to the joint venture, General Motors (GM) has previously invested $2.3 billion in LG Chemical, the South Korean battery giant, to form a joint venture with a 50-50-share ratio that will produce battery monomers that will be used in GM’s future electric vehicle offerings, including pure electric trucks scheduled for release in the fall of 2021. On January 20this year, LG Chemical and Hyundai Motor Group reached a partnership in the field of electric vehicles, with the goal of jointly setting up an automotive battery company, with a joint venture to be half-funded by the two companies and an estimated investment of several trillion won. In January, Reuters, citing sources, reported that Volkswagen planned to buy a 20 percent stake in Guoxuan Gaoke in the hope of accelerating its presence in the Chinese market. Previously, Volkswagen also plans to invest 900 million euros in a joint battery research with Swedish start-up Northvolt, part of a joint venture and part lying in an equity investment in Northvolt.

A Volkswagen board member toldmedia that a joint venture with suppliers can share the risks of building new factories to add new capacity, suppliers are not sure whether the market can develop rapidly, and they feel that this is an opportunity, so the future trend of battery companies will be joint ventures, The advantage of the joint venture is that with the new plant, VW will be able to learn early about the progress of manufacturing, while power battery companies will reduce risk.

“Both joint ventures and self-built battery plants have accelerated the expansion of power battery capacity, and as capacity expands, the cost of batteries will fall.” Cao He, secretary-general of the National Federation of Industry and Commerce Automobile Chamber of Commerce, told reporters. According to Bloomberg’s BnEF, the price of in-vehicle batteries was $156 per kilowatt hour in December 2019, down 87 percent from 2010 and expected to fall to $100 by 2023.

Zhang Qiang, an auto industry analyst, believes that in the current power battery market, “combined and divided” is presenting at the same time, on the one hand, more car companies and power battery companies are tightly tied, but on the other hand, there are many original lying unbreakable “alliances” are changing. This is mainly due to the simultaneous emergence of two different market trends: first, the level of consumer demand, the level of technology and cost control requirements are gradually increasing, resulting in more vehicle companies can only be bundled with battery companies to reduce research and development and production costs; These capacities are not yet sufficient for fast-growing power battery companies and competition will effectively reduce the cost of buying batteries.