Just about the entire US southwest is ready to jump into the financial bed with Tesla Motors as the electric-vehicle maker looks for a place to put its massive "gigafactory." But lithium-ion battery maker Panasonic? Not so much, says Bloomberg News.

Panasonic President Kazuhiro Tsuga spoke to a group of reporters in Tokyo and said he strategically understood the need for Tesla to go large-scale with its factory production, especially as it prepares to debut an SUV as well as a model that will be priced at about half of what a Model S costs. But, he added cautiously, there will be significant risk involved in the investment and his company hasn't committed to its involvement just yet.

Texas dealers are already sounding the alarm against changing franchise laws to woo the battery plant.

Panasonic or not, Tesla is taking the "go big or go home" approach to a factory that it says will cost about $5 billion ($2 billion already committed from Tesla itself) and may support 6,500 jobs. That latter point has states such as Arizona, Nevada, New Mexico and Texas tripping over themselves to figure out the financial incentives necessary to be the further production base for California-based Tesla. Texas auto dealers are already sounding the alarm against changing the state's franchise laws to woo the automaker's battery plant. An open letter sent by the Texas Automobile Dealers Association says it does not believe, "that economic development efforts to bring any business to Texas should in any way be connected to changing established laws in Texas for the singular benefit of any one company. ... We believe this sets a bad precedent for future economic development efforts by linking them to special interest changes in law."

Last fall, Tesla expanded its battery-production agreement with Panasonic, saying at the time that Panasonic would provide almost 2 million automotive-grade battery cells for the Model S and Model X during the next four years.


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  • 44 Comments
      Gary
      • 8 Months Ago
      I guess what Panasonic is thinking is, there is no way tesla can make a cell even close to same standard. Nissan has been making batteries for the leaf for years now with little improvement. Tesla thought A123's were not good enough and it seem LG is Korea's best all with years of experiance. Tesla has mastered many things in the Model S, motor, chasis, drive train and putting the battery pack together. I don't think even with Panasonic investing in them are they going to help them make batteries or give them any trade secrets. Tesla knows the only way to make a 30K model X is to make their own cells but I don't know how they are going to get a 200 mile range out of it and make a profit on it. I am a fanboy of Elon but unless there is a break through in battery tech. (I know huge break though coming in 5 years clams everyone) Panasonic has legitimate questions to this gigafactory.
        archos
        • 8 Months Ago
        @Gary
        "I guess" "Panasonic is thinking" "I don't think". I don't see any legitimate questions being brought up. Just wild guesses and assertions, all suggested by you.
        archos
        • 8 Months Ago
        @Gary
        "I guess" "Panasonic is thinking" "I don't think". I don't see any legitimate questions being brought up. Just wild guesses and assertions, all suggested by you.
        archos
        • 8 Months Ago
        @Gary
        "I guess" "Panasonic is thinking" "I don't think". I don't see any legitimate questions being brought up. Just wild guesses and assertions, all suggested by you.
      purrpullberra
      • 8 Months Ago
      Panasonic and Tesla are too intertwined for them to forego the potential benefits of staying partially tied to Tesla. Tesla has helped stabilize the company and its profits, helping them open shutter factories and the like. The companies will continue to work together: this is all about Panasonic wanting a bit more opportunity for profit, a slightly better deal then they currently see on the table. Tesla has PLENTY of battery knowledge, they have developed the technical specifics that Panasonic use to produce the exact battery Tesla need. Another part of the deal is that Tesla intend to source virtually every raw material from the US or western hemisphere which would help the Japanese company (by helping stay away from China). A less hostile supply chain is a HUGE goal of Tesla's with the gigafactory. Someone will invest with Tesla in the factory, there is basically no chance that won't happen. The whole enterprise isn't guaranteed but they will fund the factory, start it up and produce some batteries. The expected numbers may not pan out but Google, Apple along with many other companies who want better batteries will be called upon if Panasonic bails (most likely they'd be American). And with Eric Schmidt's recent admission of a man-crush for Elon I can't see him letting Tesla's factory fail to materialize. But I see this as a situation where Panasonic wants a bit better deal than what they see now and they are setting up to get it.
      GSP
      • 8 Months Ago
      Tesla's agreement with Panasonic for the next four years is for Two Billion cells according to their press release and AutoBlog's report linked in this article. Two Million cells is only enough for about 280-300 cars! GSP
      Bryan Lund
      • 8 Months Ago
      Tesla will sign another battery agreement down the road apiece to be able to get the Panasonic batteries they will need. Tesla is on a roll and Musk is really banking on building an affordable Tesla Model E and I am not one who will count him out. Not after all the hurdles Elon Musk and Tesla continue to run up to and successfully jump over. Panasonic apparently can't throw good money after investment trump-up offers from Musk. The thing is, Tesla is going to successfully build this factory, watch them do it. Lawmakers in the 4 Southwestern states would be stupid ta throw nails in the road in front of them now.
      • 8 Months Ago
      So...the Texas Automobile Dealers Association says "special interest changes in law" are bad? I'm fairly confident they just broke irony.
      Jim1961
      • 8 Months Ago
      It warms my heart to know dealers are afraid of Tesla.
        EVSUPERHERO
        • 8 Months Ago
        @Jim1961
        So the dealers want to play with magic, boy they should know what their fighting for, are they ready for a perfect storm, cause once Tesla starts theirs no going back. Tesla is a charmer, and will eat their harts, like Jeffery domer.
          EVSUPERHERO
          • 8 Months Ago
          @EVSUPERHERO
          Maybe it's domr? Who cares the guy was a freak and should never have been used in a song.
      Grendal
      • 8 Months Ago
      Don't forget that Panasonic went to the Japanese government to get a loan to cover their investment in the giga-factory. Maybe the government is telling them no...
      James
      • 8 Months Ago
      Panasonic is broke. They have been hemorrhaging money for years. They can not take any big chances anymore.
        Dave
        • 8 Months Ago
        @James
        Feel free to enlighten us. $112 Billion in profits on $7.5 Trillion in sales doesn't sound like they're broke..... http://investing.money.msn.com/investments/stock-price?Symbol=PCRFF&ocid=qbes
          dgaetano
          • 8 Months Ago
          @Dave
          Those numbers are in Yen, not $. It's about 100 to 1 conversion rate.
          John Hansen
          • 8 Months Ago
          @Dave
          Japan's 2012 GDP was $6 trillion.
          Actionable Mango
          • 8 Months Ago
          @Dave
          Regardless of the currency, that's a profit margin of about 1.5%. That level of profit is terrible unless this is a company that is spending incredible amounts of money investing for expansion.
      Electron
      • 8 Months Ago
      Frankly I understand Panasonic's cold feet. The stock market may already have priced in over the top successful execution of Elon Musk's dreams (based on an awesome reputation, granted) but in reality things are rarely that clear cut. Tesla needs that Gigafactory to make its foray in the mass market but so far the sort of market size for EVs Tesla is envisioning just doesn't exist. The gamble is that $35K/200 miles and Supercharger infrastructure support is the winning concept that will convince consumers in droves. It sounds like it could be but it's definitely uncharted territory. There is also the problem that Tesla could be forced into a retail model that's unsuitable for the sort of products it's making eventually, greatly reducing its chances of success. There is also a certain risk in making a giga investment in battery tech that will be superseded by better technology some day, depending on how adaptable the investment is to new technology. Tesla is going for broke with its Model E mega investment so that had better be a pretty compelling car. I wonder if Panasonic was shown a prototype already?
      Tysto
      • 8 Months Ago
      Something tells me that Texas has changed plenty of laws to accommodate special interests in the energy sector in the decades since the dealer's association got THEIR anti-competition special interest codified into law. Also, I'm certain Musk would not build his own battery factory unless he was sure it could build better, cheaper batteries ideal for both cars and solar systems. Just as he surprised everyone by coming thru on super-fast charging and battery swapping, I think he has every intention of outperforming expectations here.
      Gary
      • 8 Months Ago
      I guess what Panasonic is thinking is, there is no way tesla can make a cell even close to same standard. Nissan has been making batteries for the leaf for years now with little improvement. Tesla thought A123's were not good enough and it seem LG is Korea's best all with years of experiance. Tesla has mastered many things in the Model S, motor, chasis, drive train and putting the battery pack together. I don't think even with Panasonic investing in them are they going to help them make batteries or give them any trade secrets. Tesla knows the only way to make a 30K model X is to make their own cells but I don't know how they are going to get a 200 mile range out of it and make a profit on it. I am a fanboy of Elon but unless there is a break through in battery tech. (I know huge break though coming in 5 years clams everyone) Panasonic has legitimate questions to this gigafactory.
      CaptTesla
      • 8 Months Ago
      Kind of funny the TX dealers association would mention changing laws for special interests.seems as if NADA has been pushing their own interstests and the the consumers throughout the country. ".. We believe this sets a bad precedent for future economic development efforts by linking them to special interest changes in law."
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