Tesla Teams with Panasonic for Gigafactory, Still Hasn't Chosen Site Location
July 31, 2014 2:33 PM
Panasonic will reportedly invest around $1 billion USD
Panasonic is expected to be Tesla Motors' main partner in the Gigafactory, according to the automaker's CEO Elon Musk, and that position was likely solidified with Panasonic's planned investment in the plant.
, Panasonic -- which already provides batteries for Tesla cars -- has agreed to invest gradually in the Gigafactory lithium-ion battery plant, but the size and timing of the investment is still unclear.
However, some reports say Panasonic will initially invest around 20 to 30 billion yen ($200-300 million USD) and ultimately spend a total of about $1 billion USD.
The deal states that Tesla will prepare, provide and manage the land, buildings and utilities while Panasonic will manufacture and supply cylindrical lithium-ion cells and invest in the equipment, machinery and other manufacturing tools.
"Given the high degree of interest in the factory in both Japan and the United States, we wanted to show our intent by signing an agreement as soon as possible. But a decision on investment will take a little longer," said Panasonic's Chief Financial Officer Hideaki Kawai.
"However, Tesla is a very important partner to us and discussions are continuing. We need to look very carefully at auto demand and respond appropriately so of course that means taking a step-by-step approach to investment."
aims to create electric vehicle batteries on a mass scale, which will bring battery costs down and help the automaker deliver an affordable EV. Tesla will invest around $2 billion in the plant through 2020 while investors will pay another $2-3 billion for a total $4-5 billion investment.
The giant Gigafactory will span 500 to 1,000 acres of land and have a space requirement of 10 million square feet. Southwestern states like California, Nevada, New Mexico, Texas and Arizona are all fighting to have the Gigafactory built in their respective states, since it will create 6,500 jobs and be a great investment in renewable energy. Tesla still hasn't selected a site yet, though.
The Gigafactory aims to produce 35 GWh of cells and 50 GWh of battery packs a year.
Tesla has good reason to up production, since its all-electric
Model S sedan has become a hit
. Tesla has seen a great year so far with 6,457 Model S sedans sold in Q1 2014 alone. For all of 2014, Tesla is expecting global delivery of 35,000 vehicles. The forecast for Q2 2014 calls for production of 8,500 to 9,000 cars, with deliveries at about 7,500.
Tesla is also preparing for its next EV, the Model X. The automaker recently shut down its production line temporarily to get its Fremont, California plant ready for
the Model X upgrades
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