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Toyota Motor Corporation and Panasonic Corporation announced Tuesday that the two companies will establish a joint venture following year to generate prismatic lithium ion batteries, solid-state batteries, and ion batteries for electric vehicles.
Contracts concluded today confirm prior reports of a formal partnership between the two businesses, and assemble on an arrangement that the pair announced in late 2017 to explore developing batteries with increased energy density in a prismatic cell arrangement.
The new joint venture intends to give a stable supply of aggressive batteries to multiple automakers — sold mostly through Panasonic — since the EV economy develops to meet growing consumer needs and to address societal issues related to power and climate change.
“As automobile electrification accelerates toward the solving of these environmental issues, batteries are a main element,” even Toyota and Panasonic stated in a joint announcement.
“However, many battery-related challenges have to be handled, including not only having advanced technical capabilities to deal with issues of cost, energy density, charging period and safety,” the announcement continued, “but also having the ability to guarantee stable distribution capacity and getting effective recycling structures. ”
The joint venture seeks to deal with these issues by drawing both companies’ tools and experience. Toyota will bring to the table its EV market data, manufacturing experience and innovative technologies related to solid-state batteries, while Panasonic will contribute its capacity to produce safe, high-capacity and high-output batteries at scale, as well as a customer base in Japan and abroad.
Equity participation in the joint venture is going to be split 51% for Toyota and 49% for Panasonic. Pending approval from competition law government, the partnership will formally launch at the end of 2020.
Toyota, which is more affordable than other automakers to adopt EVs, announced in 2017 that it intends to sell more than 10 battery-electric versions from the mid-2020s, leading to revenue of 5.5 million electrified vehicles by 2030. The new joint venture can help support this effort.
Today’s announcement also reflects the growing rivalry among battery producers, according to Mitalee Gupta, energy storage analyst at Wood Mackenzie Power & Renewables. While Panasonic has been a Tier 1 lithium ion battery cell supplier for many years, she noticed that Chinese sellers like CATL and BYD are ramping up their own battery cell creation and gaining market share.
“This strategic partnership shows that Panasonic is now looking beyond Tesla to keep its location in the race to catch the global EV economy, by leveraging Toyota’s position among the largest automakers,” mentioned Gupta.
Tesla, one of Panasonic’s highest-profile clients , announced recently that it is looking at other cell suppliers for the Shanghai Gigafactory, including local Chinese businesses. Reports this week reveal that Tesla has been in discussions using China’s Tianjin Lishen, but that no deal has been reached to date.
Around 60 percent of global cell production currently occurs in China, according to Gupta. South Korean vendors like LG Chem and Samsung SDI are in the procedure of establishing production bases in the country to be certain that they aren’t losing out with this global competition, she explained. Toyota’s joint venture together with Panasonic will also have factories in China, as well as Japan.
Through the joint venture, both Toyota and Panasonic also have dedicated to researching and developing solid-state batteries, a technology that according to Wood Mackenzie Power & Renewables will start becoming commercially workable after 2025. Last year WoodMac monitored more than half a million dollars worth of investments in solid-state technology from automakers and cell suppliers.
“With the EV industry jointly hoping to focus on improving energy density of now ’s cells and overcoming current challenges with cobalt cathodes and graphite anodes, those investments are going to grow quickly in the coming years,” stated Gupta.
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