Tesla, Panasonic sign Gigafactory agreement

July 31, 2014 // By Paul Buckley
Tesla Motors, Inc. has signed an agreement with Panasonic Corporation that lays out their cooperation on the construction of a large-scale battery manufacturing plant in the USA, known as the Gigafactory which will employ about 6,500 people by 2020.

The Gigafactory will produce cells, modules and packs for Tesla's electric vehicles and for the stationary storage market. The Gigafactory is planned to produce 35 GWh of cells and 50 GWh of packs per year by 2020.

The agreement will see Tesla prepare, provide and manage the land, buildings and utilities while Panasonic will manufacture and supply cylindrical lithium-ion cells and invest in the associated equipment, machinery, and other manufacturing tools based on their mutual approval.

A network of supplier partners is planned to produce the required precursor materials. Tesla will take the cells and other components to assemble battery modules and packs. To meet the projected demand for cells, Tesla will continue to purchase battery cells produced in Panasonic's factories in Japan. Tesla and Panasonic will continue to discuss the details of implementation including sales, operations and investment.

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. The Gigafactory will be managed by Tesla with Panasonic joining as the principle partner responsible for lithium-ion battery cells and occupying approximately half of the planned manufacturing space; key suppliers combined with Tesla's module and pack assembly will comprise the other half of this fully integrated industrial complex.

JB Straubel, Chief Technical Officer and Co-founder of Tesla Motors said: "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."

Yoshihiko Yamada, Executive Vice President of Panasonic, added: "We have already engaged in various collaborative projects with Tesla toward the popularization of electric vehicles. Panasonic's lithium-ion battery cells combine the required features for electric