Panasonic and other Japanese investors could throw up to $1 billion into the upcoming U.S. car battery plant that the company plans to build with Tesla Motors.
Panasonic plans to invite other Japanese material suppliers to join in investing in the new factory.
The Japanese consumer electronics company and Tesla plan to have the factory go online in 2017 when it build lithium-ion batteries for Tesla's electric car business. Panasonic is currently Tesla's battery supplier. The plant is expected to product batteries at a lower cost, a savings which can then be passed along to consumers, Tesla said. Currently the Tesla Model S sells for $89,000.
The plant, described as a "giga factory" will handle every aspect of battery production from processing raw materials to assembly. In addition to supplying batteries to Tesla it may also end up selling them to Toyota, according Nikkei.
"The factory is really there to support the volume of the third generation car," said Tesla CEO Elon Musk on an earnings conference call last week. "We want to have the vehicle engineering and tooling come to fruition the same time as the giga factory. It is already part of one strategy, one combined effort."
There is also a strong possibility that the plant's batteries could have a wider impact.
In a note to clients on Tuesday as reported by FoxBusiness, Morgan Stanley analyst Adam Jonas said Tesla's quest to disrupt the trillion-dollar car industry offers an "adjacent opportunity" to equally disrupt the trillion-dollar electric utility industry. Should it be able to become the preeminent low-cost producer of next-generation batteries, its impact may have far larger reverberations, he said.
Morgan Stanley's upbeat report and rating drove Tesla's stock up almost 30 percent during trading on Feb. 25.
This news came on the same day that Consumer Reports named the Tesla Model S at its top auto pick for 2014. The magazine cited the car's excellent acceleration, handling and nice ride as some of the reasons for it taking the top spot. However, the real reasons it won out is the amount of technology packed into the car. Consumer Reports noted it has a 17-inch touch screen that controls most of the car's functions, is totally keyless, has full Internet access and a 225-mile driving range. It takes about five hours to charge the car's battery.
Tesla expects to ship about 35,000 Model S cars this year, a 55 percent increase.
