Panasonic ties up with Norwegian firms for battery production for European markets

Panasonic, Equinor and Norsk Hydro will explore opportunities to set up a lithium-ion battery production business in Norway, targeting auto makers as potential customers, the firms said on Wednesday.

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Norway, which relies heavily on oil and gas revenues, aims to become the world’s first country to end the sale of fossil-fuel powered cars, setting a 2025 deadline. Fully electric vehicles now make up about 60 percent of monthly sales in Norway.

The three companies said in a joint statement that the initiative would be “based on Panasonic’s leading technology and targets the European market for electric vehicles and other applications.”

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The potential business could supply cylindrical batteries to Tesla Inc’s new electric-car plant in Germany, a Panasonic spokeswoman said.

The initial phase of the project will involve consulting potential customers and holding talks with Norwegian and European authorities, the companies said in a joint statement.

Panasonic is already a leading lithium-ion producer and has a major joint factory in the US state of Nevada with electric carmaker Tesla, where it is planning to expand its existing by adding a new production line next year.

The Japanese firm’s executive vice president Mototsugu Sato said the partnership would “potentially pave way for a robust and sustainable battery business in Norway.”

“We expect battery production to grow rapidly as a solution to the world’s number one challenge, climate change,” said Arvid Moss, Hydro’s head of energy and corporate development.

“We believe the combined strengths of Panasonic, Equinor and Hydro represent an attractive starting point for exploring the possibilities for a profitable and sustainable battery business in Norway, where we have a strong foothold, renewable power base and close proximity to the European market.”

Batteries make up about 40 percent of the value of an electric car, and the market is growing fast in Europe as consumers look for greener alternatives to petrol and diesel.

China currently controls two-thirds of worldwide cell manufacturing.

But the EU hopes to increase its share from the current three percent to 25 percent by 2028.

Last year the bloc approved 3.2 billion euros of state subsidies from France, Germany, Finland, Sweden, Italy, Belgium and Poland to stimulate a European battery industry and meet homegrown demand.