Panasonic agrees to partner with Tesla on the new Gigafactory. Tesla Motors has a bold vision of mass-producing electric vehicles. According to this week's press release, the Gigafactory is being created to enable a continuous reduction in the cost of long range battery packs in parallel with manufacturing at the volumes required to enable Tesla to meet its goal of advancing mass market electric vehicles. Even though customers are still lining up to get a Model S (which costs between $70,000 - $100,000), the company is now focusing on reducing costs in order to make the SUV Model X and the company's third production vehicle, which is being aimed at a wider audience. At around $35,000, the Model III can compete with the BMW 3-Series and Mercedes-Benz C-Class sedans. With both companies looking for innovative ways to mass-produce Lithium-Ion batteries, this joint venture combines complementary expertise and resources. Tesla will provide the location and facilities and Panasonic will install the manufacturing equipment, machinery, and tools in the new U.S.-based factory. Though Panasonic's exact financial contribution has yet to be determined, Tesla has estimated the factory will cost up to $5 billion by 2020.
“We will reach a plan that is profitable,” Panasonic Chief Financial Officer Hideaki Kawai said at a news conference in Tokyo. “We will do step-by-step investment to meet the gradually growing needs.”
The Economist writes that the Model III is expected to almost match the nearly 300-mile range of the bigger Model S, without taking as long to charge up. To do that and hold the selling price down won’t be easy. Industry analysts believe that the 85 kilowatt-hour lithium-ion battery now used in the Model S costs Tesla almost as much as the $35,000 at which it plans to sell its smaller sedan.
JB Straubel, Chief Technical Officer and Co-founder of Tesla Motors says, "the Gigafactory represents a fundamental change in the way large scale battery production can be realized. 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."
Read the Full Press Release Here: http://www.teslamotors.com/about/press/releases/panasonic-and-tesla-sign-agreement-gigafactory