Panasonic Corporation and TeslaMotors, Inc. have signed an agreement that lays out their cooperation on theconstruction of a large-scale battery manufacturing plant in the United States,known as the Gigafactory.
According to the agreement,Tesla will prepare, provide and manage the land, buildings and utilities.Panasonic will manufacture and supply cylindrical lithium-ion cells and investin the associated equipment, machinery, and other manufacturing tools based ontheir mutual approval. A network of supplier partners is planned to produce therequired precursor materials. Tesla will take the cells and other components toassemble battery modules and packs. To meet the projected demand for cells,Tesla will continue to purchase battery cells produced in Panasonic’s factoriesin Japan. Tesla and Panasonic will continue to discuss the details ofimplementation including sales, operations and investment.
The Gigafactory is beingcreated to enable a continuous reduction in the cost of long range batterypacks in parallel with manufacturing at the volumes required to enable Tesla tomeet its goal of advancing mass market electric vehicles. The Gigafactory willbe managed by Tesla with Panasonic joining as the principle partner responsiblefor lithium-ion battery cells and occupying approximately half of the plannedmanufacturing space; key suppliers combined with Tesla’s module and pack assemblywill comprise the other half of this fully integrated industrial complex.
JB Straubel, Chief TechnicalOfficer and Co-founder of Tesla Motors said: “the Gigafactory represents afundamental change in the way large scale battery production can be realized.Not only does the Gigafactory enable capacity needed for the Model 3 but itsets the path for a dramatic reduction in the cost of energy storage across abroad range of applications.”
Yoshihiko Yamada, ExecutiveVice President of Panasonic, added, “We have already engaged in variouscollaborative projects with Tesla toward the popularization of electricvehicles. Panasonic’s lithium-ion battery cells combine the required featuresfor electric vehicles such as high capacity, durability and cost performance.And I believe that once we are able to manufacture lithium-ion battery cells atthe Gigafactory, we will be able to accelerate the expansion of the electricvehicle market.”
Cost reductions will beachieved through optimized manufacturing processes driven by economies of scalepreviously unobtainable in battery cell and pack production. Further pricereductions are achieved by manufacturing cells that have been optimized forelectric vehicle design, both in size and function, by co-locating supplierson-site to eliminate packaging, transportation & duty costs and inventorycarrying costs, and by manufacturing at a location with lower utility andoperating expenses.
The Gigafactory will producecells, modules and packs for Tesla’s electric vehicles and for the stationarystorage market. The Gigafactory is planned to produce 35GWh of cells and 50GWhof packs per year by 2020. Tesla projects that the Gigafactory will employabout 6,500 people by 2020.