The demand for lithium batteries, key components in electric vehicles (EVs), have skyrocketed in recent months – with onlookers, including Elon Musk, saying they are the new oil.
Japanese tech giant Panasonic secured approval for a $4bn (£3.3bn) battery plant on Wednesday night, in a bid to keep up with demand from EV makers.
Panasonic said the factory will eventually lower the cost to produce EVs.
The new factory in the US is expected to be even larger than Tesla’s Gigafactory, which Musk said he hoped to be the biggest battery cell facility in the world “over time” in April at its unveiling.
Lithium batteries are expected to increase energy capacity fivefold, which could boost EV range by more than 15 per cent and slash production costs.
Daniel Clarke, thematic analyst at Global Data, told City A.M. today: “Elon is absolutely right that lithium-ion batteries are the new oil. It is certainly true that oil will play a key role for some time to come, but thinking longer-term, the energy transition is not optional, it is an imperative.
“Lithium-ion batteries, used in EVs and energy storage, will be the bedrock of our global efforts to fight climate change.”