In 2020, Toyota and Panasonic formed a joint venture called Prime Planet Energy & Solutions to manufacture advanced lithium-ion prismatic batteries. Toyota controls 51% of the joint venture and Panasonic 49%. Last week, PPES said in a statement that it plans to reduce the cost of batteries by 50% by the end of next year, according to Inside electric vehicles.
The statement does not say how this 50% cost reduction will be calculated. Is it 50% cheaper than the current cost of manufacturing Panasonic batteries? 50% less than the cost of Tesla’s batteries? 50% less than CATL or Samsung or SK Innovation? And how exactly will the costs be reduced? The PPES announcement ignores these important details. The company has created a useful tool Youtube video that paints a brilliant picture of the future of mobility. It’s full of nice graphics, easy platitudes, and empty promises.
PPES is led by Hiroaki Koda – a former Toyota executive – who says the long-term goal is to cut costs by up to 70% by 2025. According to Bloomberg, around 60% of the cost of prismatic lithium-ion batteries is related to resources such as lithium and cobalt, while the remaining 40% relates to development, production and investment. The joint venture is hard at work trying to improve batteries for electric transport. “It’s a competitive world,” Koda says. “There is a certain price point necessary for electric vehicles to spread. If we don’t respect that, we won’t sell.
Prime Planet Energy & Solutions’ original goal was to manufacture batteries for hybrids, which Toyota likes to call “auto-charging electric cars”. Currently, it holds 25% of the global hybrid battery market. But the focus is now on battery-powered electric cars.
PPES installs prismatic lithium-ion battery manufacturing lines for electric vehicles at its existing national facilities in Himeji, Japan. Now here’s where things get interesting. The planned output from the new production line site will be sufficient to power 80,000 battery-electric cars per year.
In contrast, Toyota intends to increase battery production at its factory in Dalian, China, to supply 400,000 hybrid and plug-in hybrid cars per year. In total, it will soon have enough batteries for nearly 2 million hybrid cars a year. Let’s see. 80,000 electric batteries against two million hybrids and rechargeable hybrids. These numbers alone tell you everything you need to know about Toyota’s commitment to the electric vehicle revolution.