Tesla Motors in cooperation with Panasonic is setting up the Gigafactory for batteries needed for their electric cars.
Panasonic will manufacture cylindrical lithium-ion cells and provide machinery and equipment for Gigafactory, said, Osaka, a Japan-based company in a joint statement with Tesla.
The deal is still on discussion stage, including Panasonic’s financial contribution which Tesla has estimated as $5 billion by 2020.
A step-by-step investment by fulfilling the growing needs reaching finally at a profitable stage is our plan, commented, Hideaki Kawai , CFO, Panasonic.
Tesla made Panasonic invest in the factory for assistance in producing cheaper batteries and transforming the company to a mass- market carmaker with 500,000 vehicles per year. Panasonic, who owns a share of 1.1 percent of Tesla, has signed a preliminary agreement.
The Gigafactory enable capacity sufficient for the Model 3 and it helps in reduction in cost of energy storage across a broad range of applications, explained, JB Straubel, co-founder, chief technical officer, Tesla.
On the other hand, Tesla is on an effort to build a factory capable of providing batteries with a 30 percent cost cut.
Besides, cheaper batteries are essential for Tesla to introduce more affordable but advanced version of Model 3 sedan due by 2017. Tesla plans to reduce the prize of new models by half of the U.S. cost of its flagship Model S.
Tesla is reviewing potential sites for the Gigafactory in Arizona, California, Nevada, New Mexico and Texas and may chose three for preparation work initially.