Panasonic’s 4680 Mass Production Pushed Back yet Again

Why It Matters

The delay stalls Panasonic’s ambition to triple EV battery output by 2028 and signals broader challenges for Tesla’s 4680 strategy, affecting supply chains and investor confidence in next‑gen battery tech.

Key Takeaways

• Panasonic delayed 4680 mass production for second time
• Tesla has not issued purchase order, halting ramp‑up
• Energy density of 4680 cells falls short of promised gains
• L&F write‑down cuts $2.9 bn contract to under $8 k
• Panasonic shifts 2170 lines to data‑center storage amid weak EV demand

Pulse Analysis

The 4680 cell, unveiled by Tesla in 2020, was billed as a breakthrough that would dramatically increase range and lower costs. Panasonic, Tesla’s long‑time battery partner, invested heavily in two new production lines at its Wakayama plant, targeting a March 2024 start that was later pushed to 2026. The latest postponement reflects a deeper issue: Tesla has not yet placed a firm purchase order, leaving Panasonic without the volume needed to justify the capital outlay. This uncertainty highlights the fragile alignment between battery manufacturers and automakers when new chemistries are still unproven at scale.

Technical performance has proved a stumbling block. Independent tests show the 4680’s energy density at roughly 244 Wh/kg, about 13% lower than the 2170 cells it was meant to replace, which achieve 269 Wh/kg. The shortfall translates into less range for vehicles like the Cybertruck and a limited European Model Y trim, prompting order cancellations. The ripple effect reaches suppliers such as South Korea’s L&F, which slashed a $2.9 bn contract with Tesla to a negligible $7,386 after demand for 4680‑compatible cathodes evaporated. These data points underscore how a single cell format can destabilize an entire supply chain.

Facing weaker EV demand and the 4680’s setbacks, Panasonic is recalibrating its strategy. The company is repurposing 2170 production capacity at its Suminoe plant for data‑center battery storage, a market that remains robust despite automotive headwinds. Its Kansas facility, opened in July 2025, continues to churn out 2170 cells, while plans for a third U.S. factory have been frozen. This pivot illustrates a broader industry trend: battery makers are diversifying beyond cars to hedge against cyclical EV demand, leveraging existing technology to capture growth in grid‑scale storage and other high‑margin applications.