Toyota-Panasonic JV to build lithium-ion batteries for hybrid vehicles

Prime Planet Energy & Solutions (PPES), a joint venture between Toyota and Panasonic, will produce lithium-ion batteries for hybrid cars at a plant in Tokushima, Japan, from 2022 to coincide with expected growth in electric vehicle (EV) demand globally, the company said on Tuesday October 6.

PPES commenced operations in April 2020 and is 51%-owned by Toyota Motor Corp while the remaining stake is owned by Panasonic Corp. The joint venture aims to develop, manufacture and sell automotive batteries to contribute to transport electrification.

PPES expects to supply approximately 500,000 hybrid vehicles per year initially and to gradually expand production output.

In August, PPES signed a Memorandum of Understanding (MoU) with Australian lithium miner Orocobre for the long-term supply of battery-grade lithium carbonate and hydroxide. Lithium is a critical component for EV batteries.

The MoU involves the supply of as much as 30,000 tonnes of lithium carbonate equivalent (LCE), starting from 2021, for use in PPES’ battery production supply chain.

Low lithium prices
Despite medium-term optimism for EV uptake and thus battery raw material prices, the lithium market has been on a downtrend for the past two years. Prices for lithium surged over 2016 and 2017. But additional capacity expansions outstripped demand growth between 2018 and 2019, triggering a slump in prices.

The Covid-19 global pandemic added further bearish pressure to lithium prices over the first half of 2020.

“For the next few years, because of idle capacity and next-in-line expansion projects, we’re going to see prices capped,” William Adams, head of battery raw materials research at Fastmarkets, said during a virtual lithium market presentation hosted by investment bank Morgan Stanley on September 24.

Fastmarkets assessed the lithium hydroxide monohydrate, 56.5% LiOH.H2O min, battery grade, spot price, cif China, Japan & Korea at $8.50-9.50 per kg on October 1, down 25% year on year from $11-13 per kg on October 3, 2019.

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