Published on July 16th, 2014 | by Steve Hanley6
Panasonic, Tesla To Sign Gigafactory Agreement Soon
Tesla Motors has been very good to Panasonic. Years ago, Elon Musk and his team decided to use lithium-ion batteries made by Panasonic to power its Model S. That car has since become the hottest, must-have vehicle on the planet, which has brought prosperity to Panasonic’s battery division for the first time in a long time.
Now, according to Asahi Shimbum, Japan’s equivalent of the Wall Street Journal, Panasonic is expected to sign an agreement with Tesla this month to assist in the creation of the new Gigafactory. The Gigafactory will produce all the batteries Tesla needs as it continues to expand production and add new models like the Model X and Model III in the future. Initial battery produced is expected to commence in 2017, and the Gigiafactory should become fully operational by 2020, producing batteries for up to 500,000 vehicles annually.
Panasonic is expected to invest about $200 million in the project, which will have an estimated total cost of around $5 billion. With the increase in Tesla sales of the Model S and the addition of other Tesla models, the company expects to increase sales in its EV battery cell sector to almost $5 billion, in fiscal 2018. That goal would be a 3.5-fold increase from fiscal 2012, meaning Tesla has ambitions beyond just building electric vehicles.