Tesla and Panasonic Partnered For the Gigafactory Battery Plant

After a report was published by a large media corporation from Japan two days ago, Tesla Motors has officially confirmed that Panasonic joined the Gigafactory bandwagon. According to the agreement, Panasonic will manufacture and supply cylindrical lithium-ion battery cells and invest $1 billion in associated equipment, machinery, and other manufacturing tools based on their mutual approval.
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Photo: Tesla
The rest of the $5 billion investment in the gargantuan battery manufacturing plant will be chipped in by Tesla Motors. The Palo Alto-based electric vehicle manufacturer will prepare, provide and manage the land, buildings and utilities. Speaking of which, it's still not known where the new facility will be erected, but the Western region of the United States of America is a highly probable area.

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. Tesla and Panasonic will continue to discuss the details of implementation including sales and operations.

This Gigafactory thingy may seem like a bit of a fuss, but the American EV manufacturer is adamant that the plant is being created to enable a continuous reduction in the cost of long range battery packs, as well as building the batteries in volumes required to enable Tesla Motors to meet its goal of advancing mass market electric vehicles. That mass market electric vehicle candidate will come in the form of the recently announced Model III, which is expected to be smaller than the Model S, start from $35,000 and steal customers of compact premium sedans such as the BMW 3 Series or Mercedes-Benz C-Class.

The Gigafactory will be managed by Tesla with Panasonic joining as the principle partner responsible for lithium-ion battery cells and occupying approximately half of the planned manufacturing space, while key suppliers combined with Tesla's module and pack assembly will comprise the other half of this fully integrated industrial complex. JB Straubel, co-founder of Tesla Motors, declared that "the Gigafactory represents a fundamental change in the way large scale battery production can be realized. 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."

Yoshihiko Yamada, executive vice-president of Panasonic, added, "We have already engaged in various collaborative projects with Tesla toward the popularization of electric vehicles. 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 EV manufacturer headed by Elon Musk informs that the Gigafactory will produce cells, modules and packs for electric vehicles and for the stationary storage market. Furthermore, the Gigafactory is planned to produce 35GWh of cells and 50GWh of packs per year by 2020 and employ about 6,500 people.
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About the author: Mircea Panait
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After a 1:43 scale model of a Ferrari 250 GTO sparked Mircea's interest for cars when he was a kid, an early internship at Top Gear sealed his career path. He's most interested in muscle cars and American trucks, but he takes a passing interest in quirky kei cars as well.
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