Tesla Inks Longtime Partner Panasonic For Gigafactory

It will employ 6,500 people, cost around five billion dollars and now will definitely involve a certain major electronics company. Panasonic has officially signed on with Tesla as a partner as they attempt to build a large manufacturing plant called a gigafactory.

According to the official Tesla Motors website, the agreement has a clearly defined project outline for each company.  The official press release explains that, “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.”

This official announcement means that Panasonic will indeed be Tesla’s sole partner on the battery factory project. However, in order to understand what this agreement means for the future, we must first look at the past. An initial supply agreement between Tesla and Panasonic took place in 2009. Back in November of 2010, Panasonic invested $30 million dollars into Tesla in the form of a stock purchase. A year later, the two companies agreed to have Panasonic provide enough batteries for 80,000 vehicles up to 2015. That deal was extended in 2013 for another four years and was worth an estimated 7 billion dollars.

The purpose of this deal and the gigafactory is to lower the cost of the lithium-ion batteries needed to power the expanding fleet of electric vehicles in the Tesla Fleet. This announcement comes on the heels of widespread speculation that both Tesla is building a gigafactory in the Nevada desert and that their next electric sedan will cost around $35,000. That price would launch Tesla right into a more affordable range that they don’t currently occupy as the Model S costs between seventy and one-hundred thousand U.S. dollars.

An overall examination of what Tesla has done in recent months says that they won’t stop making headlines anytime soon. From lawsuits on a state-by-state basis for the opportunity to sell their vehicles using a direct sales model, to opening up their patents in what they called an effort to simply expand the electric car market, this company is trying to grab interest and appear bold. They are doing