New Panasonic arm to build inside Tesla Gigafactory

New Panasonic arm to build inside Tesla Gigafactory

From wire service reports

Japanese electronics giant Panasonic Corp. announced this month that it has established a new company to make lithium-ion batteries inside the Tesla Gigafactory, a $5-billion battery manufacturing complex now under construction in Sparks, NV.

The new company, Panasonic Energy Corporation of North America, will produce and sell lithium-ion batteries in such quantities as to allow Tesla to cut the costs of the long-range battery packs needed for its mass market electric vehicles. Tesla's goal is to start rolling out 500,000 new electric vehicles per year by 2020.

Tesla and Panasonic have been working together in various collaborative projects toward the popularization and growth of electric vehicles since 2007. Panasonic says it plans to continuously expand operations meeting with Tesla's vehicle delivery schedule, driven by the progressive rollout of new vehicles and across global markets.

"Our initial investment amount in the factory will be tens of billions of yen," said Panasonic CEO Kazuhrio Tsuga earlier this month at CEATEC Japan, the Combined Exhibition of Advanced Technologies trade show, according to wire reports. "We will expand the size as we go by pouring in further installments of similar amounts," he added.

Last summer, when Panasonic and Tesla signed their partnership agreement, Tesla co-founder and CTO J.B. Straubel said, "The Gigafactory represents a fundamental change in the way large scale battery production can be realized. Not only does [it] enable capacity needed for the Model 3 (vehicle), but it sets the path for a dramatic reduction in the cost of energy storage across a broad range of applications." 

Tesla's Model S sedan contains more than 7,000 lithium-ion battery cells, which the automaker gets from Panasonic . While the battery cells are similar to those used in laptops and game consoles, Tesla's are specifically designed for electric vehicles and were jointly developed by both Tesla and Panasonic.

The gigafactory is expected to employ about 6,500 people. Eventually, Tesla hopes to drive down battery costs so that it can come out with the Model 3, an electric vehicle that will cost about $35,000 .