Panasonic to help build Tesla’s battery ‘gigafactory’

Leading electric car manufacturer Tesla has announced it will team up with electronics giant Panasonic to create a massive new battery manufacturing plant in the US.

The so-called ‘gigafactory’ will primarily produce essential components for Tesla’s all-electric range but will also work on energy storage technology.

Tesla say the factory will allow them to lower costs by consolidating the supply chain, making their lithium ion batteries 30% cheaper.

Under the terms of the deal, Panasonic will manufacture and supply the lithium ion cells and invest in the required equipment and machinery. Tesla will then assemble the battery modules and packs.

The facility, which may cost as much as $5 billion (£2.9bn), will be based in Nevada, Arizona, Texas, New Mexico or California and is expected to create around 6,500 jobs by 2020.

“The gigafactory represents a fundamental change in the way large scale battery production can be realised,” said JB Straubel, chief technical officer and co-founder of Tesla. 

“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.”

Indeed, some analysts expect the factory to have an even bigger impact on the energy sector than on the automotive sector.

Writing after plans for the gigafactory were unveiled earlier this year, Morgan Stanley’s Adam Jonas said Tesla could no longer be seen as just a niche premium auto manufacturer.  

“Tesla’s quest to disrupt a trillion dollar car industry offers an adjacent opportunity to disrupt a trillion dollar electric utility industry. If it can be a leader in commercialising battery packs, investors may never look at Tesla the same way again,” he wrote.   

‘‘If Tesla can become the world’s low-cost producer in energy storage, we see significant optionality for Tesla to disrupt adjacent industries.”

Photo: jecoopr via Flickr

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