Panasonic and Tesla have reportedly entered into an agreement involving Panasonic's participation in Tesla's upcoming Gigafactory, according to newswire reports.

Initially, Panasonic is expected to invest JPY20bn (US$194m) to JPY30bn in the factory, equipping it with the machinery to make battery cells. The company could eventually invest up to $1bn in the factory.

Tesla is hoping to begin construction on its first Gigafactory this year. The company wants to double the world's supply of lithium-ion batteries by 2020.

Tesla says that by the end of the first year of volume production of its then "mass market vehicle" (called Model 3), it expects the gigafactory will have driven down the per kWh cost of its battery pack by more than 30% (as the gigafactory ramps up battery production in 2017).

Useful link to PDF presentation slides on Gigafactory plans