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Toyota, Panasonic To Establish New Hybrid EV Battery Production Line In Japan

A joint venture between Panasonic Corporation (OTC: PCRFY) and Toyota Motor Corporation (NYSE: TM) is set to begin the production of batteries for hybrid electric vehicles in Japan in the next two years.

· 10/06/2020 04:25

A joint venture between Panasonic Corporation (OTC:PCRFY) and Toyota Motor Corporation (NYSE:TM) is set to begin the production of batteries for hybrid electric vehicles in Japan in the next two years.

What Happened: The prismatic lithium-ion batteries will be made at the Tesla Inc (NASDAQ:TSLA)-supplier Panasonic’s Tokushima Prefecture-based plant on a new production line, Prime Planet Energy & Solutions Inc, the joint venture entity, said in a statement Tuesday.

The production line in Western Japan will begin making the batteries in 2022 for nearly 500,000 vehicles a year, the company said, adding that “the global electric vehicle market is expected to continue growing rapidly.”

Why It Matters: Panasonic said last month it was expanding its production capacity at Tesla’s Nevada Gigafactory by 10% by adding a new EV battery manufacturing line.

Battery makers such as China’s CATL and Korea’s LG Chem Ltd (OTC:LGCLF) expect to double their revenues to $25.3 billion by 2025. 

Panasonic’s Japan move comes at a time when analysts expect the growth of battery makers to be stunted in the long-term after Tesla revealed a plan to halve battery costs and make them at its own factories.

The Elon Musk-led company revealed a new battery design at its battery day event, which it claims would cost 50% less and increase power by six times and energy by five times, while giving vehicles an extra 16% range. 

Price Action: Panasonic OTC shares closed 1.73% higher at $8.51 on Monday. On the same day, Toyota shares closed 0.28% higher at $132.10 in New York.

Photo courtesy: Prime Planet Energy & Solutions Inc