Panasonic To Sign Gigafactory Battery Deal With Tesla This Month

Tesla

JUL 17 2014 BY ERIC LOVEDAY 47

Tesla Giga Factory

Tesla Giga Factory

Panasonic 18650 High Capacity Lithium Batteries

Panasonic 18650 High Capacity Lithium Batteries

Japanese media is now reporting that Panasonic is expected to ink the gigafactory deal with Tesla Motors sometime this month.

“Panasonic is expected to sign a contract this month to help Tesla construct a plant and produce batteries for its vehicles.”

The gigafactory is expected to be operational in 2017, though it won’t operate at full capacity until there years later in 2020.

In regards to its gigafactory investment:

“Panasonic is to be the core participant, likely investing more than 20 billion yen. ($200 M USD)”

Other partners will likely be needed, as the total investment required to get the gigafactory up to full speed is claimed to be up to $5 billion (510 billion yen).

Once fully realized, the gigfactory will supposedly produce enough battery cells for up to 500,000 electric vehicles annually.

The Asahi Shimbun concludes with these statements:

“Panasonic is seeking to increase sales in its EV battery cell sector to 450 billion yen in fiscal 2018. That goal would be a 3.5-fold increase from fiscal 2012.”

“The company is expanding its battery operations in the hopes of establishing it as a core business. Panasonic’s household electronics business previously held that position, but sales have stagnated in recent years.”

Source: The Asahi Shimbun

Categories: Battery Tech, Tesla

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47 Comments on "Panasonic To Sign Gigafactory Battery Deal With Tesla This Month"

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James

Go Panasonic!

The gap between $200 million and $5 billion is huge – but to break ground will spur even more interest.

A modular approach is needed, wherein the first segments of the facility are up and running whilst additions are being constructed simultaneously. Funny how supply meets demand eventually.

This Gigafactory has to get done, stat! Without it, the future of EVs seems tentative. It’s the linchpin in the whole game of ending the ZEV Compliance Car nonsense and the Hydrogen Fool Cell smokescreen.

Tesla themselves is going to put up $2B of that 5B for the site. I’m surprised Panasonic is only putting in 200M. They’re going to need a lot of other suppliers and partners or banks to fill in the rest of that $5B cost.

Tesla doesn’t need a gig factory. A mega or even kilo will do. With the few thousand car sales, no need for Panasonic to waste money on this.

I think, Tesla paid Panasonic $300 M for them to invest $200 into the gig factory. $100M is Panasonic’s charge to even participate in this scam.

The reporting on Tesla finally is getting fair. “claimed to be up to $5 B” is good. Tesla claims this, and so it claimed a lot of money from public – a whopping $2 B! Gone to their personal bank accounts.

Anon

This isn’t even worthy if being called trollbait. Please seek professional assistance, ASAP!!!

Seriously.

TeV

Agree with Anon – seriously, why do you even bother posting here? Your complete lack of knowledge, understanding or useful input on the topic of all things EV just makes you look like more and more of a douche with each post.

Mikael

35 000 cars this year times 80 kWh on average equals 2,8 GWh per year today.

Giga is already used… but hopefully one day they will be batteling for being number one in car sales and a Terafactory is used 😉

MDEV

Welcome Cheryl’s husband 🙂

James,
“.. but to break ground will spur even more interest”
Yes, yes. It will show the world how many pick mattocks Tesla owns. It will be quite a sight; Elon and company digging up ground in rows.

IDK

I hope that is enough $$ to get it going the way Tesla wants it. Hmm…

Rob Stark

The $200M investment by Panasonic is likely the first installment not the total sum.

Past reports indicate it does not want to invest in one lump sum. Rather, it would like to invest as it sees Tesla production and the overall BEV market expand.

David Murray

Still no development on WHERE this thing will be located?

TomArt

Nope, just lots of juicy speculation to generate clicks…

GeorgeS

haven’t we already missed the announcement date Tesla announced earlier for both inking a deal AND selecting a site??

Looks like Panasonic is getting their way and not coughing up too much money…..ooops I mean making “incremental investments”.

Depending on how you interpret the selection process, the final location for the first factory won’t happen until year’s end, while at least one site/state had the process started in June. Here is the most recent quote from Musk on the announcement itself:

“I would expect that we do a down-select for gigafactory 1 before the end of the year.”

Tesla has yet to say which sites have been/are being targeted, other than the process itself was starting in June. They did shoot me an email (a few weeks ago) saying this about the particular projects before they pick the final “winner”:

“We are probably going to do two or maybe three states all the way to creating a foundation and completing the plans and getting approvals and everything.“

Mikael


http://i0.wp.com/c1gas2org.wpengine.netdna-cdn.com/files/2014/04/giga-1.png

As usual with Tesla the delays are substantial. But as long as they keep going forward and get there sooner or later I’m content.

I will be very happy when counstruction work of some kind start at one, two or three potential sites. That is when words turn into action and so far I haven’t seen Musk not complete something that has been physically started.

Rob Stark

Tesla just reiterated Model III unveiling in 2016(NAIAS?) and deliveries to begin to customers in 2017.

It also reiterated a base price ~$35k.

Mikael

The car that should have been unveiled in 2014, sold in 2015…For $30k

Oh wait, unveiled in 2015 sold in 2016 for $35k.

Or wait… $35-$40k unveiled in 2016 and sold in 2017.

We might see a car or two on the market before 2018 but I’m pretty sure it will be cuting very close to 2018.

Oh well, we can at least comfort us with our 2013 Model X…

I do love Tesla, but you have to take their time frame and then add a lot of time to that to make it realistic. Same goes for prices.

Rob Stark

2017 and $35k has been the goals for the last two years.

What auto companies have been able to meet their original ten year plan for alternative energy vehicles?

Where is my 100 MPG Supercar promised by the Detroit 3 during the Clinton Administration?

Shouldn’t GM be selling 300k Volts per year at $25k a piece with their new economies of scale?

Hasn’t Toyota et al promised an affordable mass market FCV in ~15 years since the Bush SR administration?

Mikael

All that I’m saying is that you should always take Tesla’s time frames and numbers with a pinch of salt because of their track record.

So 2017 and $35k today means 2018 and $40k in reality.
It’s just good for people to know how much they have to save up and when they should prepare their leases to end or so 😉

Bonaire

They re-iterated $35K? Simon Sproule in an interview yesterday with the LA times says “will sell for about $40K”. Simon is the VP of public relations at Tesla.

TomArt

Accounting for inflation, perhaps? 😉

Mikael

50% increase in 3 years 🙂 That is some massive inflation 😛

TomArt,
“Accounting for inflation perhaps”.

How quickly you come up with your Tesla excuse. Are they idiots that they didn’t know inflation is part of life, when they quoted $35K?
Still wondering if the $35K comes with driver and passenger seats, or people pay ‘extra’ for those options. If you are a true Tesla fan, you can manage driving while standing up, you know. Or sitting on the floor. That will also reduce the COD ( coefficient of drag), and the car could be just 3 ft tall. That’s the way to get to 200 mile range in a $35K car.

TeV

Wow, completely witless and unfunny. Except to you, apparently.

Mikael

Is it you Justine? Or is is Talulah?

TomArt

CherylG was sick of the sexist comments.

TomArt

I think that Tesla is going the multiple site route is that they will need them both complete, as well as attempting to avoid production delays until at least one of them is complete and running at capacity.

Rob Stark

I am not privy to Tesla insider information but CA elbowing its way into the selection process with sweet incentives has probably delayed the final selection(s).

Due diligence takes more than a couple of weeks and CA has brought a package of incentives that is really worth considering.

This is a salient point.

California was left out of the mix originally because the political/regulatory environment there makes it very difficult to build a manufacturing base for something like lithium batteries very tricky. ie) slow as molasses

However, Tesla still solicited/accepted offers from CA, and it appears like some of them were good enough for the company to put California locations back into the mix. In so doing, they pretty much had to give up the timeline they originally were looking for.

Feels like a case of Tesla was anxious to get going/had the resources in the bank (thanks to the debt offering) to physically get started, but probably were too over-excited right out of the gate and now are thinking things through a little more.

Lensman

Rob, I’ve been wondering the same thing myself. No word on what has caused the delay in Tesla Motors breaking ground on at least one of two (or perhaps three) possible sites for its GigaFactory– previously announced to happen before the end of June– but it does seem plausible that it may be because TM is waiting for California to settle the details on its best offer.

A more cynical interpretation of events is that the whole GigaFactory plan was just a ploy to get more states to allow sales of Tesla Motors cars. But while that may have been part of the plan, my guess is that the plan for a GigaFactory is real, even if moving forward on that plan isn’t quite as urgent as TM has said it was.

James

It doesn’t surprise me that Panasonic is taking its time signing up to the gigafactory. What you have to understand is that Tesla/Elon Musk is basically asking Panasonic to change its whole core business from consumer electronics to battery manufacture, specifically for BEVs and not just any BEVs, principly Teslas. That is a HUGE leap of faith for any company to make, in a start up that didn’t even exist 12 years ago!

Rob Stark

Panasonic has said it wants to move away from erratic consumer electronics market(burned with cell phones and plasma TVs) and into more stable business to business products if not necessarily EV battery supplier.

James,
Its great to see you finally opened your eyes. I think, it was you who got all emotional when I called this a hoax-a-factory 3-4 months back right on this site. At that time, the tone was:
– Partners are jumping in like crazy fishes with billions in their hands
– This is so important, it just can’t wait; it needs to start right away
– It will be so big that you can see it from Mars

Just search Gigafactory on insideevs.com, and we can see the tone change over time.

The fact is, Tesla is asking Panasonic: Panasonic, you charge me too much. Come to my place with all your knowledge, expertise and money and build me batteries 30% cheaper. All I can tell you is, how to ‘break ground’ at 3 or more places simultaneously. And yeah, there is no guarantee that we can consume all those batteries that will be built there.

Anyone can see, that it’s Panasonic who will be doing Tesla a favor, not the other way around.

TomArt

No, what Tesla is saying is, you can’t supply me with enough batteries fast enough. Here’s a factory, start chugging.

TomArt

Given Tesla realities, I still do not see any Model X orders being filled until the end of Q2 2015.

And, I have assumed for many months now that the first Model III orders will be filled around the same time in 2018. Expecting anything sooner will most likely breed more resentment and ridicule.

TomArt

Tesla STILL has not unveiled the new prototype, then they have to make their alpha units for shakedown and such, and then they have to make their betas (production-intent) for all-season road testing and crash-testing. Then, the final design is put into production…Q3 2015, anyone?

TomArt

And, yes, the only thing we know for *certain* is that the Model III prototype will be unveiled at the 2015 NAIAS. A Tesla rep at the Tyson’s Corner gallery confirmed that last weekend when I stopped by.

TomArt

But 2017 deliveries is bull$hit…Model III will arrive in 2018 as a 2019 model year…count on it…

sven

Tesla model year = the calandar year in which it is built. A Tesla’s model year is determined by the vehicle’s build date. All Tesla’s built from Jauary 1 to December 31 belong to that model year.

TomArt

Right – forgot about that – the Model S debuted in mid-2012 and was called the 2012 Model S…thanks!

Lensman

$200 million sounds like a lot, but it’s only 4% of the $5 billion Tesla Motors says it needs for the GigaFactory. $200 million is the amount previously quoted for what Panasonic is willing to invest; I was really hoping this article would be news about a more substantial investment.

I don’t know what Panasonic’s financial situation is, but only 4% of the total needed for capital investment in the GigaFactory doesn’t sound at all like they’re committed. If 96% of the investment comes from other companies (including, of course, TM), then it appears Panasonic isn’t going to be a major partner in the factory, even if they are supposed to be supplying all the know-how.

Mint

Money can come from anyone. There’s trillions sitting in bank accounts earning 0% interest.

Tesla primarily wants battery IP (i.e. every single detail about its production) from Panasonic, and Panasonic wants a cut from every cell produced.

The $200M is a token investment to show Panasonic is on board (otherwise people will question whether Panasonic is really going to help Tesla in earnest, as they also want this market), and that will draw other investors.

Ocean Railroader

I wounder though how much Panasonic had to spend to expand several of their existing battery factories a few years ago. In that I remember a story about Panasonic building two new factories to cash in on the growth in lap top sales but the sales market crashed on computers. While a year later Tesla started devouring truck loads of batteries. This made Panasonic reopen these two closed battery factories and even expand them.

It might be that Panasonic might be able to open a small battery factory for 500 million inside the shell of the Giga Factory as a first phase. As this first small phase produces batteries it will help pay for the next larger phases of the Giga factory.

In that I think if Tesla makes 60,000 model S cars along with 20,000 Model X cars a year that would devour up all the existing and future phases of battery capacity for the next few years.

TomArt

Good point, the Fremont factory isn’t at full capacity yet, but it is there because they plan to need all of it and then some. Why wouldn’t the Gigafactory be the same way?

Tech01x

People are giving the $200 million figure from the article too much weight. That figure is suspiciously similar to the $200 million figure that Panasonic has given to their fiscal 2015 (current) battery plant expansion plans. Those plans include the expansion of the Suminoe Factory in Osaka and other battery plants, some of which have nothing to do with Tesla. Chances are, this figure was lifted from that announcement and is not related to the Gigafactory at all.

Further, Panasonic’s investment is going to happen in stages on an as-needed basis. Remember, Panasonic only needs to contribute equipment, personnel, and training up until near the initial production runs. Further, the $4 to $5 billion dollar total investment figure is for hitting nameplate capacity in 2020. It is not the figure necessary to deliver cells in 2017.

Ocean Railroader

Here is a story to back this idea up about Panasonic making their existing battery factories bigger http://www.autonews.com/article/20131021/OEM06/310219870/panasonic-to-increase-its-battery-capacity

Personally I think there is room for the Battery factory in Japan and the Giga factory in that Tesla will eat it all up.

TomArt

Given global demand and US consumer trends, 50k S and 50k X per year (mostly 85kWh models) is a very reasonable expectation for the rest of this decade, and the Model III will simply add to it (not materially cut into sales). So, yes, that’s why I said above that Tesla is starting multiple factories for a number of reasons, one of which is most likely because they alone will need all of them (which they can’t say publicly right now because that would make them even more laughing stock and compromise the stock value).