Panasonic is considering investment in a US car battery plant planned by Tesla Motors, sources have told a news agency.
One Reuters source familiar with the plan estimated Panasonic could spend around JPY100bn (US$979m).
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The factory, expected to start production in 2017, is part of Tesla’s blueprint for a more affordable electric vehicle and would be the first major, integrated US facility producing battery cells for electric cars, the report said.
Tesla last week gave some initial hints about plans for a lithium-ion battery plant, or ‘giga factory’, that would likely include Panasonic and other suppliers as partners. It said that further details would be announced this week.
Tesla declined to comment to Reuters. Panasonic, the car maker’s primary supplier of lithium-ion batteries, said it wanted to expand its cooperation with Tesla but declined to comment further.
“We have a cooperative relationship with Tesla and are looking at various ways of strengthening that relationship in the future,” the company told Reuters.
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By GlobalDataSources told the news agency Panasonic was considering investing in the giga factory project with an eye to expanding battery supplies to Tesla when its current supply contract ends in 2017. One of the sources added that the project would likely require a total of about JPY100bn.
“Panasonic is looking at various types of cooperation, including taking on some of the investment,” the source said. “But Tesla is a venture business, so there’s a need to be cautious in looking at the risks involved.”
The JPY100bn figure was first reported by the Nikkei business daily which also said Panasonic was inviting several Japanese materials makers to join the project.
The said the plant would produce small, lightweight batteries for Tesla and may also supply Toyota and other automakers.
The report said Tesla’s giga factory would lower battery pack costs by shifting material, cell, module and pack production to one spot.
In Tesla’s earnings conference call last week, chief executive Elon Musk reportedly said the electric car maker expects to build the factory with more than one partner, but a “default assumption” was that Panasonic, as a current battery cell partner, “would continue to partner with us in the giga factory”.
“The factory is really there to support the volume of the third generation car,” Musk said on the call. “We want to have the vehicle engineering and tooling come to fruition the same time as the giga factory. It is already part of one strategy, one combined effort.”
Stifel analyst James Albertine told Reuters the giga factory could be far more than an auto opportunity because Tesla could have an even more significant opportunity to supply the energy storage market. He expects the factory would take two to three years to build and require a $5bn to $6bn capital injection.
