In a report Japan’s Nikkei said, Panasonic will begin producing its new lithium-ion battery for Tesla from 2023 and plans to invest around $705 million (80 billion yen) in production facilities in Japan.

Panasonic’s new lithium-ion batteries is likely to make electric vehicles (EVs) more attractive to consumers since they are likely to extend mile range by about a fifth.

“We are studying various options for mass production, including a test production line we are establishing this business year. We don’t, however, have anything to announce at this time,” said Panasonic.

In October, Panasonic had unveiled the 4680 format (46 millimetres wide and 80 millimetres tall) battery, which is five times bigger than the one it currently supplies to Tesla.

Panasonic’s new batteries will also drive down production costs for Tesla.

Panasonic will manufacture the 4680 batteries at a plant in Wakayama prefecture in Western Japan, with output of less than 10 gigawatt hours a year, equivalent to around 150,000 vehicles, said the report from Nikkei.

Panasonic is the sole maker of the more advanced battery for Tesla, at least for its pricier models, even as Tesla seeks out batteries from global suppliers.

($1 = 113.5400 yen)

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