Panasonic to produce batteries for Tesla in China next year

At the 2016 Beijing International Automobile Exhibition on Tuesday, Panasonic China disclosed that their electric vehicle battery factory in Dalian will go into production in 2017. Panasonic China expects that their automotive electronics business will reach RMB 10 billion (USD 1.5 billion) in 2020.

As the biggest global electric vehicle battery supplier, Panasonic has built a joint venture battery factory with Tesla in the US. Its Dalian battery factory was an important move for Panasonic to expand its automotive electronics business in China. It seems that Tesla will also be the main target for Panasonic in the Chinese EV battery market.  

Tesla has its own niche in China. In March, the general manager of Tesla China, Zhu Xiaotong, said to the National Business Daily that China has become the second largest market for Tesla. Tesla’s sales in China saw a 400% YoY increase in March.

Tesla launched its USD 35,000 Model 3 in China on April 1. Elon Musk, the founder of Tesla, said in a recent interview with BGR that the Model 4 will be much cheaper than the Model 3. This could create a buying frenzy in China, since the Model 3 is very popular with Chinese consumers.

Tesla also showcased its Model X at the 2016 Beijing International Automobile Exhibition. With its all-wheel drive and a 90 kWh battery providing 257 miles of range, Model X has ample seating for seven adults. And it’s ludicrously fast, accelerating from zero to 60 miles per hour in as quickly as 3.2 seconds. Besides Tesla, other EVs including the EH 400 from BAIC, BYD’s E500, LeEco’s LeSee model, SIAC Motor’s Roewe e950 and Hongqi (Red Flag) H7 PHEV are also showcased at the exhibition.

In general, China’s EV sector has seen explosive growth in the past two years. According to the Ministry of Industry and Information Technology, EV output in China increased fourfold year on year to 379,000 units in 2015. In the first three months of 2016, EV output in China reached 63,000 units with a sale of 58,000 units. The ministry also pointed out that China’s EV market will exceed 10 million in 2030.

The main reason why China’s EV industry is so hot is likely because the government actively boosts EV sales by providing subsidies and tax breaks for manufacturers, as well as driving restrictions on gas-powered vehicles to curb the extremely serious pollution problems in major cities.

(Top photo from teslamotors.com)

1 Comment
  1. PANASONIC has been producing TESLA batteries in China. What a big liar that Musk is.

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