Panasonic and Tesla Motors Join Forces to Realize Cost Effective Electrical Vehicles

By CIOReview | Friday, August 1, 2014
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FREMONT, CA: Panasonic Corporation and Tesla Motors have entered into an agreement in order to build Gigafactory, a large-scale battery manufacturing plant in the U.S with an objective to boost Tesla’s market presence in the field of electric vehicles and also to bring about a continuous reduction in the cost of long range battery packs.

Gigafactory will produce cells, modules and packs for Tesla’s electric vehicles and for the stationary storage market. The plant is expected to generate 35Gwh of cells and 59Gwh of packs per year employing up to 6,500 people by 2020.

Optimized manufacturing processes driven by economies of scale previously unobtainable in battery cell and pack production will result in desired cost reductions. Further price reductions are achieved by manufacturing cells that have been optimized for electric vehicle design, both in size and function, by co-locating suppliers on-site to eliminate packaging, transportation and duty costs and inventory carrying costs, and by manufacturing at a location with lower utility and operating expenses.

Gigafactory will be managed by the companies in collaboration in which Panasonic would be responsible for manufacturing and supplying cylindrical lithium-ion cells occupying approximately half of the planned manufacturing space; key suppliers combined with Tesla's module and pack assembly will comprise the other half of this fully integrated industrial complex.

Tesla on the other hand will prepare, provide and manage the land, buildings, and utilities. The company will continue purchasing battery cells produced by Panasonic taking the cells and other components to assembly battery modules and packs. Panasonic would also invest in the associated equipment, machinery, and other manufacturing tools based on their mutual approval. The companies will continue to hold discussions with each other regarding sales, operations, and investment.

"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," said Yoshihiko Yamada, Executive Vice President, Panasonic.