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Tesla and Panasonic Reach Gigafactory Agreement

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Tesla and Panasonic

Tesla and Panasonic reached an agreement Thursday on plans for the automaker’s Gigafactory

Tesla and Panasonic have announced a deal that will see their partnership expand to the creation of the automaker’s long-gestured Gigafactories. The deal expands the cooperation between the two companies, which began with Panasonic providing lithium-ion battery cells for Tesla vehicles.

The deal states that Tesla will be responsible for securing a location for the Gigafactory (be it in Nevada, New Mexico, Arizona, or Texas), building the facilities, and maintaining them. Panasonic’s obligations include providing lithium-ion cells and purchasing necessary equipment. Said equipment will fill half of the manufacturing space, while equipment provided by as-yet unnamed supplier partners—along with Tesla’s module and pack assembly—will comprise the other half.

Tesla Motors co-founder and Chief Technical Officer JB Straubel says that the Gigafactory will not only provide the necessary capacity for the upcoming Model 3, but it will also “[set] the path for a dramatic reduction in the cost of energy storage across a broad range of applications.”

The Gigafactory also provides a more streamlined manufacturing process that drives down cost through economies of scale. The co-location of suppliers on-site at the Gigafactory will eliminate the need for various overhead costs and further drive down prices, which should serve Tesla’s ultimate goal of reaching a wider market with cheaper cars and technology.

“We have already engaged in various collaborative projects with Tesla toward the popularization of electric vehicles,” says Yoshihiko Yamada, Executive Vice President of Panasonic. “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.”

The location of the first Gigafactory has yet to be announced (although some sleuthing and educated guessing puts it just outside of Reno, Nevada), but when production begins, the output is expected to provide batteries for around 500,000 EVs annually.

Source: Tesla Motor Company Blog