Home > Panasonic and Tesla sign on large scale battery factory

Panasonic and Tesla sign on large scale battery factory

article image The Gigafactory will enable capacity needed for the Tesla Model 3 electric car.

PANASONIC and Tesla Motors have signed an agreement to construct a large-scale battery manufacturing plant in the United States.

The plant, also called the Gigafactory, will change the way large-scale battery production is done, claim the companies.

The Gigafactory will enable capacity needed for the Tesla Model 3 electric car, and also set the path for a dramatic reduction in the cost of energy storage.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.

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.

Tesla, which already buys battery cells produced in Panasonic's Japanese factories, will continue to do so in order to meet the projected demand for cells.

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 principal 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.

Cost reductions will be achieved through optimized manufacturing processes driven by economies of scale , which were previously unobtainable in battery cell and pack production.

The companies will achieve further price reductions by making cells that have been optimised for electric vehicle design, both in size and function, by co-locating suppliers on-site to eliminate packaging, transportation and duty costs and inventory carrying costs, and by manufacturing at a location with lower utility and operating expenses.

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.

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