For most companies, a hundred years in business means a century of gradual adaptation. For Panasonic Energy, it means a century of building the exact expertise the world now desperately needs. The company that made batteries for bicycle lamps in 1923 is now the sole supplier of cylindrical NCA lithium-ion cells to Tesla, the most talked-about automaker on earth. That continuity is not an accident. Formally spun out as an independent operating company under Panasonic Holdings in April 2022, Panasonic Energy carries the full weight of its parent's battery heritage into a moment when EV adoption, grid storage, and consumer electronics are converging into one enormous demand signal. With 873.2 billion yen in revenue for FY2025 (ending March 31, 2025), the company sits near the top of the global battery industry despite a year marked by slower-than-expected EV sales and a notable pullback from its biggest customer. The story of Panasonic Energy is ultimately a story about focus. While rivals diversified into solar panels, displays, and consumer appliances, Panasonic's battery division kept doubling down on electrochemistry. That bet is now paying off, in yen, in patents, and in the 4680 cylindrical cells rolling off production lines in Wakayama, Japan. AI-generated image Automated robotic assembly of cylindrical lithium-ion cells at a Panasonic Energy production facility. 1923 Battery origins 873.2B FY2025 revenue (yen) 13.8% Operating margin FY2025 3 Cell formats (18650/2170/4680) ~$5.8B USD equivalent revenue +28% Industrial segment growth A Century of Cells: Panasonic's Battery Origins In 1923, Konosuke Matsushita's company introduced a battery designed to keep bicycle lamps lit longer than the competition. It was a modest product by any measure, but it established the core principle that still defines Panasonic Energy: build a battery that outlasts and outperforms what came before. Through the mid-20th century, the company expanded its dry cell and primary battery business steadily across Japan and then globally. By the time cylindrical lithium-ion chemistry arrived in the early 1990s, Panasonic (then still branded Matsushita in many markets) had the manufacturing discipline and materials science expertise to move fast. Mass production of cylindrical Li-ion cells began in 1994 , making Panasonic one of the earliest volume producers of the format that would go on to define portable electronics and, later, electric vehicles. The 18650 cell, named for its 18mm diameter and 65mm length, became the workhorse of the industry. Laptops, power tools, early EVs, and industrial equipment all ran on versions of it. Panasonic built its manufacturing infrastructure around this cylinder, and that decision compounded over decades into an unmatched depth of process knowledge. When Panasonic Holdings reorganized its operating businesses in April 2022, it gave the battery unit its own identity: Panasonic Energy Co., Ltd., headquartered in Moriguchi-shi, Osaka. CEO Kazuo Tadanobu inherited not just a manufacturing operation but a century of institutional knowledge about how to make electrochemical cells that are dense, reliable, and consistent at scale. That heritage is the foundation on which everything else in the company's current strategy rests. Historical context: Panasonic's cylindrical battery manufacturing traces back to 1923. By 1994, the company was mass-producing lithium-ion cells commercially, giving it a 30-year head start on many of today's EV battery challengers in cylindrical cell manufacturing expertise. The Tesla Partnership That Changed Everything Around 2008, Tesla was a startup with a Roadster and a big vision, searching for a battery supplier willing to commit to something far outside the comfort zone of incumbent automakers. Panasonic said yes. That decision, made when Tesla had virtually no revenue and considerable doubt surrounding its survival, is now the defining commercial relationship of Panasonic Energy's modern history. The partnership began with the 18650 cell format, supplying Tesla's original Roadster and then the Model S and Model X. As Tesla scaled toward mass-market vehicles, Panasonic scaled with it. The two companies jointly developed the 2170 cell (21mm diameter, 70mm length) for the Model 3 and Model Y, producing it at the shared Gigafactory Nevada facility that became one of the largest buildings by floor area on earth. AI-generated image The Gigafactory Nevada, a joint venture between Tesla and Panasonic, remains one of the largest battery production facilities in the world. The Gigafactory arrangement is unusual in the industry. Panasonic occupies cell manufacturing space within the building and sells cells to Tesla at agreed terms, while Tesla handles module and pack assembly. This tight physical integration allows fast iteration and quality feedback loops that are difficult to replicate across supplier-customer relationships that span continents. Panasonic's NCA (nickel-cobalt-aluminum) chemistry is central to the Tesla relationship. NCA offers higher energy density than the competing LFP (lithium-iron-phosphate) chemistry used by CATL and built into many of Tesla's Standard Range models. For Tesla's long-range variants and performance models, NCA remains the preferred choice, and Panasonic is the only company producing it at cylindrical automotive scale. The Cybertruck, launched in late 2023, added another vehicle line to Panasonic's supply contract. The truck uses 4680-format cells, which brings us to the next chapter of this story. Tesla Supply Relationship at a Glance Vehicle Cell Format Chemistry Roadster (original) 18650 NCA Model S / Model X 18650 NCA Model 3 / Model Y (LR) 2170 NCA Cybertruck 4680 NCA Panasonic supplies NCA cylindrical cells across Tesla's vehicle lineup, with the 4680 format now entering volume production. The 4680 Bet: Building Tomorrow's Cell Today Tesla unveiled the 4680 cell concept in September 2020 at its Battery Day presentation. The cell is named for its dimensions: 46mm diameter, 80mm length. Compared to the 2170, it is roughly five times larger by volume. Tesla's engineering team projected that at full production maturity, the 4680 would cut per-kilowatt-hour costs substantially and enable structural battery pack designs that reduce vehicle weight and complexity. AI-generated image The 4680 cell's larger format reduces manufacturing steps and improves thermal performance compared to the 2170 and 18650 formats. Panasonic committed to the 4680 format with characteristic patience. Rather than rushing a product to market to match Tesla's announcement timeline, the company spent years on process development at its Kusatsu laboratory in Shiga Prefecture. Volume production began at the Wakayama factory in October/November 2024 , making Panasonic one of the first manufacturers to bring 4680 cells to commercial-scale output. The Wakayama facility represents a meaningful capital allocation decision. Producing a larger cell requires retooled winding and welding equipment, new quality inspection systems, and adjusted thermal management protocols. The company essentially rebuilt portions of its manufacturing stack to support a cell format that did not commercially exist five years earlier. On the chemistry side, Panasonic announced in September 2025 that it had developed an anode-free battery design targeting approximately 25% higher energy density compared to current cells. The technology, expected to reach production readiness around 2027, eliminates the traditional graphite anode, replacing it with a lithium metal layer that forms during the first charge cycle. Applied to a Model Y, the company projected this could add roughly 90 miles of range. That kind of improvement would be a step change in an industry where single-digit percentage improvements are considered notable progress. Anode-free technology: Panasonic's September 2025 announcement described an anode-free cell design targeting 25% highe