Along the path to finalizing plans for a new Gigafactory that will manufacture batteries for its electric vehicles, Tesla has announced it is partnering with electronics company Panasonic for the massive factory in the works.
The agreement will put Panasonic in the direct fold for the battery plant in the United States. Tesla will manage the Gigafactory while Panasonic will be the principal partner responsible for lithium-ion battery cells. It will occupy half of the planned manufacturing space while key suppliers, along with Tesla's module and pack assembly, will occupy the other half of the complex.
In a release about the move, the companies clarified their roles. "Tesla will prepare, provide and manage the land, buildings and utilities. Panasonic will manufacture and supply cylindrical lithium-ion cells and invest in the associated equipment, machinery, and other manufacturing tools based on their mutual approval. A network of supplier partners is planned to produce the required precursor materials. Tesla will take the cells and other components to assemble battery modules and packs. To meet the projected demand for cells, Tesla will continue to purchase battery cells produced in Panasonic's factories in Japan."
It's not a surprising move, considering Tesla and Panasonic have been discussing the project for a number of weeks. Tesla says the large battery factory will give the companies the ability to create lower-cost batteries en masse, which will allow for the mass-marketing of its electric car. The Model 3 should be on the market and on the road by the end of the decade.
The Gigafactory, Tesla's name for the large factory it plans to build to handle production of the lithium ion batteries its vehicles require to run, reportedly needs upward of $5 billion dollars to get off the ground and will employ as many as 6,500 workers.
"The Gigafactory represents a fundamental change," says JB Straubel, Tesla's chief technical officer, in a statement. "Not only does the Gigafactory enable capacity needed for the Model 3, but it sets the path for a dramatic reduction in the cost of energy storage across a broad range of applications."
Still, as Tech Times has reported, the location of the factory remains in limbo. A number of states appear on the chopping block, including Arizona, California, Nevada, New Mexico and Texas. California and Nevada appear to be the frontrunners, with Tesla rumored to be considering breaking ground in two different sites to ensure at least one factory is erected in a timely manner.
CEO Elon Musk had previously said the company wasn't seriously considering California, but the state may be back in the running for the site, according to a report. It recently passed some very appealing tax credits and Tesla said it was pleased with the measures California took to speed the process.
"California has re-entered the race and closed the gap with the other states," a Tesla spokesman said July 24.
Either way, with Panasonic now on board, Tesla is hopeful that it will pick up speed and a location can be found and ground broken. The factory is needed to push costs of producing its electric vehicles down and thus bring the overall price of the vehicles lower. That way, the company hopes to attract more interest in its environmentally friendly cars.
Yoshihiko Yamada, executive vice president of Panasonic, said Panasonic already is working with Tesla to popularize electric vehicles, and this move will enhance those efforts. "Panasonic's lithium-ion battery cells combine the required features for electric vehicles such as high capacity, durability and cost performance. And I believe that once we are able to manufacture lithium-ion battery cells at the Gigafactory, we will be able to accelerate the expansion of the electric vehicle market."
The Gigafactory will produce cells, modules and packs for Tesla's electric vehicles and for the stationary storage market. Tesla said it plans to produce 35GWh of cells and 50GWh of packs per year by 2020.
