Panasonic has announced that it is delaying the production of its cylindrical 4680 EV battery cells, which it is contracted to make for Tesla, until April – September 2024. Volume production was originally scheduled to begin between April 2023 and March 2024.

According to Reuters, Panasonic stated that the delay is “to introduce performance improvement measures that will further enhance competitiveness.”

Panasonic has prepared for production with a pilot line at its Wakayama, Japan, factory.

4680 already produced at Tesla

Tesla is already producing the 4680 itself in its Fremont, CA pilot plant and at Gigafactory Texas; those latter cells are to be used in the company’s Cybertruck, ramping up to full production this year. The Model Y also uses the 4680.

But Tesla alone can’t produce enough of the cells and, to cover the difference is looking to Panasonic—and possibly elsewhere: LG Energy has announced plans to produce its own version of the cell in its Ochang, Korea facility and possibly its upcoming Queens Creek, AZ facility, first announced in March, 2022.

Tesla first introduced the novel battery cell design at its Battery Day event in 2020: The 4680 is bigger, holds five times as much energy, and produces six times as much power as the company’s previous cells. The larger size—46mm × 80mm- gave the new cell its 4680 moniker.

The design promises more capacity and capability and is potentially less expensive to produce, with Tesla asserting that it enabled the potential to reduce battery costs by more than 50% over time.

That was in 2020: In its Q1 2023 financial update, Tesla senior VP of engineering Drew Baglino told investors that they are making progress on all of these fronts and have reduced costs by 25%--halfway to that 50% goal.

“On the cell design, we’re in production with not only the first generation tabless cell we unveiled on Battery Day but a second more manufacturable version in Texas today,” Baglino was quoted by Eletrek as saying. “We saw big improvements with pack manufacturing with the 4680 cell on the structural pack concept, 50% lower capex and 66% smaller factory with the same output in gigawatt hours per year.”

With Tesla claiming both design and production process improvements, it well behooves Panasonic, as its supplier, to try to meet those new metrics as well before going to full production.