Panasonic is considering setting up a new plant jointly with Tesla Motors in the US to make lithium-ion batteries for electric vehicles.
Tesla's goal is to produce a mass market electric car in approximately three years. Consequently, the car maker aims to leverage their projected demand for lithium ion batteries to reduce their cost faster than previously thought possible.
Panasonic is reportedly one of their strategic battery manufacturing partners who will come on board to build a large scale factory.
This plant will allow Tesla to achieve economies of scale and minimise costs through innovative manufacturing, reduction of logistics waste, optimisation of co-located processes and reduced overhead.
According to Tesla, the Gigafactory is designed to reduce cell costs much faster than the status quo and, by 2020, produce more lithium ion batteries annually than were produced worldwide in 2013.
By the end of the first year of volume production of Tesla's mass market vehicle, the Gigafactory will likely have driven down the per kWh cost of battery pack by more than 30 percent.
Tesla operates a highly automated factory in California and according to Wired, “The process would make Henry Ford double over in envy.”
Panasonic is asking Japanese materials makers to set up bases at the new $100 billion plant. This will help create integrated production of batteries starting 2017.
Panasonic will likely supply batteries to Toyota as the latter has an alliance with Tesla.