Panasonic to invest $700 million to produce Tesla EV battery

The powerpack could help make electric vehicles more attractive to motorists by extending cruising range by about a fifth.

Panasonic logo.

Japan's Panasonic will begin producing its new lithium-ion battery for Tesla from as early as 2023, with plans to invest about 80 billion yen ($705 million) in production facilities in Japan, the Nikkei reported on Monday.

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The powerpack could help make electric vehicles (EVs) more attractive to motorists by extending cruising range by about a fifth,

the Nikkei reported, without saying where it obtained the information.

How will solid-state batteries make electric vehicles better?

"We are studying various options for mass production, including a test production line we are establishing this business year. We don't, however, have anything to announce at this time," Panasonic said in a statement sent to Reuters .

Panasonic unveiled the 4680 format (46 millimetres wide and 80 millimetres tall) battery in October. At around five times as big as batteries it currently supplies to Tesla, it is also expected to help the U.S. electric vehicle maker lower production costs.

Panasonic will make the 4680 batteries at a plant in Wakayama prefecture in Western Japan, with output of less than 10 gigawatt hours a year, equivalent to around 150,000 vehicles, the Nikkei said.

Panasonic is the sole maker of the more advanced Tesla battery, ensuring it remains a key supplier to the U.S. company, at least for its pricier models, even as the EV maker seeks out battery suppliers in China and elsewhere .