Panasonic Bets on US Battery Supply Chain Growth with New Silicon Venture
Japanese conglomerate Panasonic is making moves to expand and strengthen the electric vehicle (EV) battery supply chain in the United States through a new joint venture with US-based Group14 Technologies. The deal aims to boost production of silicon-carbon anodes, a key component in lithium-ion batteries that is seen as essential for meeting growing EV demand.
Competing in a Rapidly Evolving Market
As major automakers aggressively ramp up their electric offerings and governments worldwide push cleaner transportation, the battery supply chain has struggled to keep pace. Panasonic, the world’s third largest EV battery supplier behind China’s CATL and South Korea’s LG Energy Solution, is still catching up with Asian rivals in adding production capacity. But this latest venture signals the company’s commitment to leading in next-generation battery tech.
The Promise of Silicon-Carbon Anodes
The Panasonic Energy unit will own 51% of the newly formed Group14-Panasonic Silicon Technologies with operations based in Washington state. Together they plan to develop and mass produce silicon-carbon anodes using Group14’s breakthrough technology. Replacing traditional graphite with silicon has the potential to dramatically increase energy density and therefore driving range.
A Game Changer for Electric Vehicles
Tesla chief Elon Musk has touted the game changing impact silicon nanowire anodes can have. His Gigafactories use Panasonic cells, though the automaker also sources batteries from CATL and LG Energy Solution. Landing exclusive access to superior silicon-carbon anodes could help Panasonic maintain and strengthen its position as a major Tesla supplier. It could also make Panasonic batteries more attractive to other EV makers over time.
Supporting the Transition with Federal Incentives
The push to scale up US production capabilities for advanced batteries aligns with the Biden Administration’s industrial policy priorities. Government grants and loans enabled through the Inflation Reduction Act provide significant incentives. Panasonic Energy President Shoichiro Watanabe emphasized the growth possibilities for electric mobility in the North American market in announcing the deal.
Looking Ahead: Next-Generation Battery Technologies
With batteries accounting for some 30-40% of total EV cost, next generation technologies that increase performance and lower prices will likely dominate going forward. Panasonic’s latest move to back Group14’s silicon anode innovation with targeted US supply chain development puts it in a strong position to lead. Rivals will certainly take note.
The company still faces pressure to more aggressively invest in production capacity as well. But as Panasonic continues its transformation under CEO Yuki Kusumi after years of restructuring, it is betting that superior battery tech and an advanced US supply chain will make it harder for competitors to catch up.