Panasonic Announces Multi-Year Agreement to Supply Electric Vehicle Batteries to Lucid Group

author: Eric Walz   

Panasonic Energy Co., Ltd. and Luxury electric automaker Lucid Group have entered into a multi-year agreement to supply batteries for Lucid's electric vehicles, including the Lucid Air sedan and forthcoming Gravity SUV. 

Panasonic Energy is a leading producer of lithium-ion batteries. The company has been Tesla's U.S. battery partner since the Model S was introduced in 2012.

The battery supply deal with Lucid aligns with Panasonic's goal of expanding battery production outside of its home country of Japan. The company plans to expand the production of EV batteries in the U.S. to meet growing demand from automakers.

Panasonic will produce lithium-ion EV batteries in the U.S. at its recently announced EV battery factory in De Soto, Kansas.

"Panasonic is a fantastic partner with both innovative technology and depth of experience," said Peter Rawlinson, Lucid's CEO and CTO. "This agreement will help us meet the growing demand for lithium-ion batteries as we continue to ramp production of the full Lucid Air line-up in 2023 and expect to begin production of our Gravity SUV in 2024."

Panasonic's Kanas battery factory initially will produce 30 GWh of cylindrical lithium ion (Li-ion) 2170 format batteries, which Panasonic said are in high demand from its automotive customers. Launching the facility to produce 2170 batteries will help Panasonic fulfill its orders more quickly, the company said in a press release in October.

Panasonic introduced the improved 2170 lithium-ion cells for the Tesla Model 3, which entered volume production in the summer of 2017. The 2170 cells pack are more energy dense and can accept higher charging rates than the previous 18650 cell format cells Tesla was using in the Model S.

Mass production of the 2170 format batteries at the plant in De Soto, Kansas is targeted to begin by March 2025. Once operational, the factory will significantly boost Panasonic's EV battery production capacity in North America.

The new battery production facility in Kansas will be Panasonic's second EV battery factory in the U.S., following the Panasonic Energy of North America (PENA) facility in Sparks, Nevada that currently supplies batteries to Tesla. 

Panasonic's Nevada factory is known as "Gigafactory 1." Over the past several years, the plant has grown to become the largest lithium-ion battery factory in the world. 

Panasonic said it selected the site in Kansas due to the proximity to Tesla's newest assembly plant in Austin, Texas. Tesla Chief Executive Elon Musk moved the company's headquarters to Texas from California in Dec 2021.

"With the increased electrification of the automotive market, partnerships with technology-leading EV manufacturers such as Lucid are critical to our mission," said Kazuo Tadanobu, President, CEO of Panasonic Energy Co., Ltd. "This partnership will help us drive growth of the lithium-ion battery industry and accelerate the world towards a net-zero emissions future."

Lucid's current battery supplier is LG Chem. The supply deal with LG Chem, which was announced in April 2020, ensures that Lucid will have the battery cells it needs for volume production of various versions of the Lucid Air sedan, as well as future models. In 2020, Lucid said that LG Chem battery cells will power standard versions of the Air sedan through 2023. 

Lucid says the cells being supplied by LG Chem provide the ideal level of efficiency needed for the standard versions of the Lucid Air, such as the recently launched Air Pure model. 

The Lucid Air Pure.

Panasonic Energy Co., Ltd. was established in April 2022 as part of the Panasonic Group's switch to a new holding company corporate structure. Panasonic Holdings Corporation serves as a holding company and eight companies are positioned under its umbrella. 

The Panasonic Energy Co., Ltd. division provides battery technology-based products globally, including lithium-ion batteries for EVs, storage battery systems and dry batteries.

In August, Panasonic announced its working on new technology that can improve a battery's energy density and boost EV range by around 20%. The company aims to produce more energy-dense batteries by 2030.

As battery chemistries improve, Lucid and other automakers may be able to use a smaller, less costly battery pack in their EVs without sacrificing range. Building EVs with smaller battery packs will also make them more affordable. The high price of EVs today is one of the barriers to widespread adoption in the U.S. 

Eric Walz

Originally hailing from New Jersey, Eric is a automotive & technology reporter covering the high-tech industry here in Silicon Valley. He has over 15 years of automotive experience and a bachelors degree in computer science. These skills, combined with technical writing and news reporting, allows him to fully understand and identify new and innovative technologies in the auto industry and beyond. He has worked at Uber on self-driving cars and as a technical writer, helping people to understand and work with technology.