Panasonic To Invest “Tens of Billions Of Yen” As First Installment Into Tesla Gigafactory

3 years ago by Mark Kane 18

Tesla And Panasonic reach Agreement Over Battery Gigafactory Partnership

Tesla And Panasonic reach Agreement Over Battery Gigafactory Partnership

Market Share Graphic Via Lux research

Market Share Graphic Via Lux research

Panasonic Corp. established a new company Panasonic Energy Corporation in the U.S. to produce batteries for Tesla in the Gigafactory complex.

Panasonic Chief Executive Kazuhiro Tsuga recently stated that:

“Our initial investment amount in the factory will be tens of billions of yen. We will expand the size as we go by pouring in further installments of similar amounts.”

10 billion of yen is roughly equal to $92 million, so tens of billions of yen must be hundreds of millions of dollars and this is just the initial installment.

It’s expected that Panasonic will contribute 30-40% of the total Gigafactory cost of $5 billion, which is $1.5-$2 billion, while Tesla will cover half $2.5 billion.

Panasonic would like to be ready with production capacity on time to not delay the Tesla Model 3:

“Our policy is to avoid a situation where Tesla wants to make more cars but doesn’t have enough batteries.”

Source: The Wall Street Journal

Tags: , ,

18 responses to "Panasonic To Invest “Tens of Billions Of Yen” As First Installment Into Tesla Gigafactory"

  1. Ocean Railroader says:

    A 92 million dollar payment now makes sense. This first payment should at least cover building utilities on site along with the building itself.

    1. Mike I says:

      Panasonic is not responsible for the building or the utilities. They are responsible for all the equipment to assemble the battery cells. Tesla will provide the building shell and the utilities. They also have to bring in all the precursor materials suppliers and those companies will have to purchase and install their own equipment to produce those parts.

      1. Mike I says:

        …those parts to feed into the Panasonic assembly line.

  2. Ryan says:

    how many gigafactories is LG building to provide enough batteries for GM’s supposed 200mi EV… i just don’t see that it is even possible

    1. c4v3man says:

      Considering GM’s electric vehicle marketing department’s handling of the Volt, they’ll only need a few part time employees working in a dusty corner of the warehouse where they build the 200 Mile EV itself.

  3. kdawg says:

    “and this is just the initial installment.”
    ———
    What’s that word… traunch.

  4. DaveMart says:

    “Our policy is to avoid a situation where Tesla wants to make more cars but doesn’t have enough batteries.”

    Whoa! Who would have thought that that would be the case!

    It must be some new business idea……

    1. Priusmaniac says:

      Davemart what do you think is happening when you reduce the price of a Tesla in half? The sales do not double, they rise exponentially. So that is not like going from 20000 cars a year to 40000 cars but going to 4000000 cars a year. Yes that is 4 millions, not 400000. It will grab 4 % of the world market. With say an average of 70 KWh per car that is 280 GWh per year to produce. And that is only the beginning when Tesla will still have the quasi monopoly on EV sedan, because latter on BMW, Audi and even Toyota will come to the chore and the 4% will grow to 20%, 40% and eventually 90% of the market. By then batteries will be produced at a staggering rate of 6300 GWh per year.

  5. Spec9 says:

    If the factory really requires $5 Billion, it sure seems that Tesla needs a lot more money/friends.

    1. Rob Stark says:

      The GF doesn’t need any more monies other than those agreed to by interested parties.

      Although Panasonic suppliers like Sanyo and Hitachi will bring their own equipment.

      Tesla has already raised $2.3 B on Wall Street for GF. Nevada is providing $195M in cash equivalents in the from of transferable tax credits.

      Any overruns can be handled by internally generated cash. Revenue will now be over $1.3B per quarter starting 4Q 2014.

      1. Spec9 says:

        Uh . . . so you are up to $2.5B. And they can’t use that revenue to cover the rest of the cost . . . I’m sure their suppliers and employees want to be paid.

  6. Peter g says:

    So Panasonic is contributing about 1/50th of the cost. A deal with LG must be looking really good to Tesla right about now.

    1. sven says:

      “It’s expected that Panasonic will contribute 30-40% of the total Gigafactory cost of $5 billion, which is $1.5-$2 billion, while Tesla will cover half $2.5 billion.”

      I’m guessing reading comprehension is not your strong suit.

      1. Peter g says:

        Yes I do have problems in that area. Can you explain the phrases Initial investment will be” and ” it is expected”

        The way I read this Panasonic has put exactly $0.00 down so far is putting $0.00 down now, and a small check will be mailed sometime in the future.

        1. sven says:

          I guess finance isn’t your strong suit either. Do you really want me to explain why it wouldn’t be prudent for Panasonic to hand Tesla a $1.5 to $2 billion check upfront before Tesla has started building the Gigafactory?

  7. Daniel says:

    Where is Tesla getting the cash for all of these investments? Gigafactory, bringing model x to market, developing model 3, opening new tesla stores, building more and more tesla stations, overseas expansions etc.?
    I mean the small tiny profit (if any) per model s can’t possibly be enough to cover, nor the money from the IPO? Or I’m I wrong? I just need some clarification haha

    1. not me says:

      Tesla got 2.5 billion USD in cash and equivalents according to last quarterly report. And they cash flow positive already(non-GAAP profitable).

      Well it could be a good idea to raise another billion in second half of 15′ or binging of 2016. But dilution would be minimal – 3 million additional shares to 130 millions already issued.

    2. Josh says:

      If they are indeed producing/selling 1000 Model S per week at an average sale price of $100,000 with their stated gross margin of 28%, that is $28 million per week in positive cash for operations.