• Image Credit: Tesla Motors
  • Image Credit: Tesla Motors
  • Image Credit: Tesla Motors
  • Image Credit: Tesla Motors
  • Image Credit: Tesla Motors
  • Image Credit: Tesla Motors
  • Image Credit: Tesla Motors
The first of perhaps 'hundreds' of gigafactories is now one step closer to reality: Tesla and Panasonic have announced their official agreement to work together on the gigafactory. The two companies have worked together for many years on electric vehicles, but this new deal takes the partnership to a whole new level.

The basic gist, since the agreement itself has not been released, is that Tesla will take care of the exterior (the "land, buildings and utilities") while Panasonic will pay for the machines inside in order to, "manufacture and supply cylindrical lithium-ion cells" that Tesla will then use to, you know, build battery packs. Panasonic's machines will take up half the space while a network of as-yet unnamed suppliers will be involved in the other half, according to the press release announcing the deal. Read it below.

There's been lots of speculation as to where the Gigafactory will be built, but the exact location probably won't be revealed until later this year, so don't expect any battery packs from the Gigafactory to be coming any time soon. That's why Panasonic is still going to be building Tesla cells in Japan for the time being.

As previously announced, the Gigafactory is expected to make batteries for around 500,000 EVs a year as well as more for stationary storage needs. That means 35 GWh worth of cells and 50 GWh worth of packs each year by 2020. We expect more information to trickle out today along with Tesla's quarterly earnings.
Show full PR text
Panasonic and Tesla Sign Agreement for the Gigafactory
Thursday, July 31, 2014

OSAKA, Japan / PALO ALTO, USA, July 31, 2014 – Panasonic Corporation and Tesla Motors, Inc. have signed an agreement that lays out their cooperation on the construction 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 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 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."

Cost reductions will be achieved through optimized manufacturing processes driven by economies of scale previously unobtainable in battery cell and pack production. Further price reductions are achieved by manufacturing cells that have been optimized for electric vehicle design, both in size and function, by co-locating suppliers on-site to eliminate packaging, transportation & duty costs and inventory carrying costs, and by manufacturing at a location with lower utility and operating expenses.

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 35GWh of cells and 50GWh of packs per year by 2020. Tesla projects that the Gigafactory will employ about 6,500 people by 2020.

Panasonic
http://panasonic.net/

Tesla Motors
http://www.teslamotors.com/blog-and-press-releases


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    • 1 Second Ago
  • 32 Comments
      jesscott
      • 10 Months Ago
      This I like. This is exactly how it is supposed to work when government keeps their filthy mits off of free enterprise. Tesla and Panasonic are filling a market void and they will OWN it and become hugely rich. Of course what will happen is that when Tesla becomes the biggest best most profitable batter producer, the greedy politicians and unions will tax and berate them to the point where they pick up and go to Mexico to avoid it all, but hey........it will be fun to watch for awhile.
        Spec
        • 5 Months Ago
        @jesscott
        This factory is being supported by all the different governments trying to obtain the factory for their local area.
          jesscott
          • 5 Months Ago
          @Spec
          I don't care if local governments want to give benies to a factory to have it relocated to their area. They can build roads and give tax breaks till their hearts content, that's competition too. What can't happen is the government sticking its fingers in a free market, it ruins innovation. and destroys confidence.
      Jason
      • 10 Months Ago
      If they Build it in Texas, there dumb, just plain DUMB!
        RexSeven
        • 10 Months Ago
        @Jason
        Mite bee write. Eye wood... Never mind, this is a waste. It's the tax laws and environmental regulations. Battery production is a dirty business and trying to make money is a waste if government just steals it from you to buy votes from worthless people. It does make Elon a little bit of a hypocrite. If you believe in socialism, build your factory in the People's Republic of California. If you are a free market capitalist, build your factory in Texas and stop ******* up subsidies.
          Bernard
          • 10 Months Ago
          @RexSeven
          "If you are a free market capitalist" You put an end to the dealership protectionist laws like the one's they're using in Texas to ban the sales of Tesla's.
          purrpullberra
          • 10 Months Ago
          @RexSeven
          Your wrong on everything. It isn't a waste. Tax laws and environmental regulations are not driving forces, Elon's/Tesla's mission is what is driving them to run the business as they are; the breaks and regulations are not strictly about Tesla at all. Everything involved in making batteries is much cleaner than everything involved in allowing you to burn oil and gasoline in a car. Oil production gets much more in tax give-aways than does everything pro-environmental. Requiring payment of tax isn't stealing. You wouldn't know worthless if you saw it in a mirror daily. Elon has never espoused socialism nor whatever your simple mind wrongly defines as socialism. As such, he isn't a hypocrite. And Texas gives away much more in tax breaks to oil companies and Toyota than Tesla has ever gotten in tax breaks from anyone. So you are 100% wrong in everything you say. I'm guessing that is a permanent state for you though.
          Rotation
          • 10 Months Ago
          @RexSeven
          If the plant is built in Texas, you can be sure it will be with many tax breaks (subsidies).
        Jameskey
        • 10 Months Ago
        @Jason
        Where dumb?
        engr00
        • 10 Months Ago
        @Jason
        funny, you calling someone dumb and then using "there" instead of the correct "they're"
        Rotation
        • 10 Months Ago
        @Jason
        It would be dumb because the packs would have to be shipped so far at significant expense. Otherwise, I would think Texas is as good a place as any and better than many. Really I would think that Nevada is the most logical place. Although they better move lots of spare packs down the hill in the winter, as I-80 can be a disaster for a day or two in a row when a storm comes through.
          purrpullberra
          • 5 Months Ago
          @Rotation
          They'll be using rail don't ya think? I like your idea above, I just see rail being much more efficient.
      Rotation
      • 10 Months Ago
      Any chance Tesla could make a fleet of trucks that are electric to transport these? Normally the battery costs would be prohibitive, but since these trucks would be transporting the (very expensive) batteries anyway, all they have to do is hook them up while in transport. They don't even need a charging system because the packs can be charged at the plant before they load them on the truck.
        purrpullberra
        • 5 Months Ago
        @Rotation
        I like the idea a lot. I'd see it as more for the last mile after the big rail journey from NV. Lots of EV heavy duty trucks to do those types of jobs. Not everything moves by rail... And it would use some of their own packs presumably once there were enough to spare. Build some for Solar City too! And then who else? Who knows? I still want them to partner with Ford to build some ModelF-150's or something like that. I know at least a few people would LOVE a Tesla truck. I know, different kind of truck. Not every truck goes more than 200 miles a day. Tesla getting even a small bite of the non-long haul trucking pie would be an incredible number of sales. That might require another gigafactory.
        jeff
        • 10 Months Ago
        @Rotation
        That is why they will ship by train....
        JakeY
        • 10 Months Ago
        @Rotation
        Interesting idea, but I would prefer rail if that was an option.
        Basil Exposition
        • 10 Months Ago
        @Rotation
        That's pretty brilliant. Elon, you listening?
      • 10 Months Ago
      Hello TESLA and PANASONIC, I own and operate a Construction Company in Texas, and I am very interested in building this monumental facility for the two of you. I can save you a lot of money and this would be a wonderful project for all of us. Please, contact me at www.penacoindustries.com, or at spenaco@aol.com to discuss in further detail. I am so very proud of both your efforts to finally bring this from drawing board to reality, you are to be commended. Once again, Thank you. PENACO INDUSTRIES
      NAIF S
      • 10 Months Ago
      Solar power and wind power, ok. Do not forget to be where there is water.
      • 9 Months Ago
      Just one question: Do we have enough Lithium to suply a gigafactory?
      rexxy
      • 9 Months Ago
      Electricity from the sun the water and the wind is limitless and cheap and clean. Go Tesla!
      EJD1984
      • 10 Months Ago
      Are the current plans to build battery packs exclusively for Tesla or to also build them for other car companies?
        purrpullberra
        • 10 Months Ago
        @EJD1984
        I'm pretty sure that Tesla would be happy to sell battery packs to other car makers provided: Tesla has enough to spare, and they use the rest of the Tesla tech, like superchargers. In any case Elon has said they want to accelerate EV growth and adoption so if they could sell packs made in the gigafactory I'm sure they would. The issue with Toyota/MB is that there aren't enough packs to spare right now.
        Card13
        • 10 Months Ago
        @EJD1984
        Tesla would be selling the batteries to other companies. Sure, those other cars will compete with them, but they are helping to drive down the cost and Tesla still gets a cut of the competitor's sales by supplying the batteries.
        Spec
        • 10 Months Ago
        @EJD1984
        I suspect that is still up in the air. It depends on how much demand has for its own cars, what others are willing to pay, what other applications are willing to pay, etc.
        Jim Stack
        • 10 Months Ago
        @EJD1984
        They will built them 1st for their cars, then for solar and other cars, even laptops and other uses. It will be the biggest battery factory in the world. They will be on the leading edge for new battery tech just like their vehicles.
        ScepticMatt
        • 10 Months Ago
        @EJD1984
        They plan to use packs for home energy storage. As for other car companies, I don't know, but they told Toyota that they couldn't produce enough packs for a larger scale EV. That might change with the Gigafactory.
      purrpullberra
      • 10 Months Ago
      Yea! It looks like Reno it is, maybe with an outside shot at California getting it. Admitting to Reno in the shareholder letter had to be well thought out to put the pressure on the other sites to get their best efforts ASAP. Getting them to say they plan on getting raw materials in means they really are serious about getting MORE than 30% savings out of the venture. They are playing in such a major way that they will get huge discounts on rail shipping just like the biggest companies today negotiate for. That along with buying direct from the mines could mean a significant % savings. They will be shipping incredible amounts of ore, battery packs and presumably cars too. Getting the energy to produce there at an affordable rate will also end up being better savings than they are willing to say at this point. Working with Solar City on this part of the venture will end up being tremendous factors in getting better than 30% cheaper batteries. And I'm thrilled they attacked head-on the idea of deliveries NOT= demand. Most people knew the idiots who were saying demand was down were lying out their asses but todays statement proves it once and for all. What a day for Tesla!
      DRAGON
      • 10 Months Ago
      Congratulations Tesla! You guys are doing what the government and public energy agencies should have done for a long time: invest in renewable energy plants.
      Avinash Machado
      • 10 Months Ago
      Excellent.
      Spec
      • 10 Months Ago
      At this point, I don't care where they build it . . . I just want to make sure they build it. If they can hit that projected 30% cost savings, it will be a HUGE game-changer.
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