Print 13 comment(s) - last by Richard875yh5.. on Aug 3 at 11:37 AM

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.

According to Tesla, 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."

Tesla's Gigafactory 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

Source: Tesla Motors

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Who blinks first?
By LBID on 7/31/2014 3:21:26 PM , Rating: 3
It's interesting to watch the ongoing game of chicken between Tesla and the State of Texas. You know Tesla would prefer to build the plant there, but they're not going to commit unless/until Texas backs down and allows Tesla's distribution model to operate freely within the state.

To me it seems a no-brainer, let Tesla sell as they will and reap the benefits of a gigantic economic boost from that plant (and potential additional ones down the road). However, I'd imagine the auto industry is bringing in cash by the traincar-load to the legislature in Austin as they attempt to protect the sacred cow of their dealership system.

Interesting theatre, in any event.

RE: Who blinks first?
By Milliamp on 8/1/2014 2:33:54 AM , Rating: 3
That won't really slow them down. They can still have showrooms where they are able to look at and test drive the car and then the order has to be made online or something after that. They are having to expand the factory to meet existing demand anyway.

Even if they built the factory they could always just fix that rule afterwards. IMO automotive companies are blowing their wad too early by fighting Tesla on over dealerships. They should be going full steam ahead on their own initiatives rather than feeding Tesla free PR trying to prevent them from operating dealerships with the world watching.

Model S is out of my price range but at this point I'd be surprised if I don't own a Tesla at some point in the future.

RE: Who blinks first?
By Azethoth on 8/1/2014 4:29:35 AM , Rating: 2
It's exactly as if both of you think dealerships belong to auto companies. The whole point of the fight is that they do not. They are parasitic middle men. They steal from consumers and they steal from auto companies. They get fat and our cars cost more.

Tesla wants to own its dealerships.

RE: Who blinks first?
By FITCamaro on 8/1/2014 7:47:56 AM , Rating: 2
Car dealerships make a greater percentage of their profits off their service department than they do off the actual sale of new cars. And not all dealerships rip you off. Especially in this economy, if you're not afraid to walk away, you can get a heck of a deal on a new car.

RE: Who blinks first?
By 1prophet on 8/1/2014 10:15:38 AM , Rating: 2
They make it on the financing and selling warranty contracts, repair work is mostly warranty at most dealerships not customer pay, unless they have a good body shop then they can make good money on body repair.

RE: Who blinks first?
By Richard875yh5 on 8/1/2014 2:59:05 PM , Rating: 2
Here's a quote from John Autoline Daily.

"Speaking of Tesla, it’s suing states to avoid selling its cars through franchised dealers. Coming up next I’ll tell you why the franchise system is better than most people realise.

The public is enamored with Tesla’s way of selling cars in its own stores. They believe the dealer franchise is archaic and that dealers are unnecessary middlemen who drive up the cost of cars. But I wonder if the public has thought this all through.

Car dealers have pretty thin margins. On average they make about a 2% profit margin. The best ones make about 5%. That’s because dealers have to compete against each other. Do you think dealers would compete so heavily if they were factory-owned? No, the factory would set the price and there would be no negotiations—just like Tesla.

Dealers will happily take your used car as a trade in, no matter what brand it is. They’ll pay you a wholesale price then turn around and retail it in their used car lot. Do you think factory-owned stores would be interested in selling used cars from another car company? Of course not. Do you know how Tesla dealers handling trade-ins? They send you to AutoNation.

Dealers are consumer-advocates when it comes to doing warranty and recall work because they get paid by the factory to do it. Do you think factory-owned stores would be so consumer friendly? Ha! Warranty and recalls would represent higher cost, not more revenue.

Personally, I have no problem with Tesla wanting to sell its cars in its own stores. I admire Elon Musk’s we’ll-do-it-our-way approach, and besides Tesla is a niche player. The real danger is when Chinese automakers finally to start selling cars in the American market. They could easily decide to side-step franchise laws because Tesla has set the precedent.

That could really wreak havoc in the car market, which would not be good for the car companies, not good for the franchisees, but most importantly it would not be good for consumers. Let’s hope the public wakes up to this before it’s too late."

To me that makes a lot of sense.

RE: Who blinks first?
By Richard875yh5 on 8/3/2014 11:37:11 AM , Rating: 2
Are people dumb enough to ignore why Tesla wants to eliminate car dealerships? Tesla wants to make sure they can survive by eliminating dealers and the competition. This looks to me Tesla wants a monopoly. So once they have enough of them, they can control the price. You'll either buy a car at Elon Musk price or leave. Wake up folks!

RE: Nevada
By Manch on 8/1/2014 2:09:26 AM , Rating: 2
I checked out your link bro and it had this link about the site being closed.

So not Nevada?

RE: Nevada
By bug77 on 8/1/2014 11:34:24 AM , Rating: 2
They should build a rolling factory so they can move it to the state that offers the most incentives. And make it battery powered, that would be the icing on the cake :-D

Photoshopped selective focus
By bigi on 7/31/2014 3:30:50 PM , Rating: 2
Photoshopped selective focus looks really weird applied to that Tesla S picture.

RE: Photoshopped selective focus
By SPOOFE on 8/2/2014 3:03:08 AM , Rating: 2
Especially with the signs in the background out of focus, but their reflections off the hood in perfect focus.

battery formula
By Richard875yh5 on 8/3/2014 9:22:17 AM , Rating: 2
Folks, does it make sense for Tesla spending all that money on an infrastructure not knowing for a fact that they have the best battery formula? What if GM has a better battery, will that put that Giga battery factory irrelevant? Maybe someone can clue me in.

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