Tesla signs $200-300 million deal with Panasonic on battery Gigafactory

Tesla battery energy storage
© Tesla

One step closer to construction

Ever since Tesla unveiled its plans to build a battery Gigafactory that would produce as many lithium-ion cells by 2020 as the whole world does now, all eyes have been on the company to see if they can really pull it off (their track record says 'yes', but you never know). First they need to decide where to build it - 5 states have been trying to woo the company - and get partners to help with financing. The project is expected to cost around $5 billion and create 6,500 jobs, so while Tesla has a couple billions in the bank, it'll need some help.

Tesla/Screen capture

That's where the Panasonic agreement comes in. The Japanese company is already a supplier of lithium-ion cells to Tesla, so this deepening of their relationship makes sense. The official announcement hasn't come out yet, but the media in Japan are reporting an initial agreement of between 20 and 30 billion yen (200-300 million dollars) and for Panasonic to be responsible for equipping the gigafactory with the machinery required to make the batteries.

Panasonic's investment is speculated to eventually reach about $1 billion, so Tesla will need other partners to complete the financing of the project.

Tesla/Screen capture

The Gigafactory won't go from 0% capacity to 100% all at once, though. New production will be added in steps to meet demand, with the goal of making enough batteries for half a million electric vehicles per year by 2020. This means that by the time Tesla comes out with the Model III in 2017, the gigafactory could be making enough relatively inexpensive battery packs to meet that demand.

The long-term plan is even more ambitious: Elon Musk has said that to meet future worldwide demand for electric cars, we'll need around 200 gigafactories!

Tesla/Screen capture

Via Nikkei, Reuters

Tags: Electric Cars | Electric Vehicles

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