Tesla’s Gigafactory will be a game-changer for the automotive industry, and as Tesla’s main battery supplier, Panasonic will be a key participant. As prospects for the massive battery plant have brightened and dimmed, not only the EV press but the major news outlets have been following the saga with keen interest.
The latest news is positive, as Panasonic confirmed its commitment to the quest, saying that it expects to be the sole manufacturer in the project. However, as previously announced, the Japanese conglomerate plans to make its investments cautiously. Senior Managing Executive Officer Yoshio Ito recently told Reuters that any expenditure this year will be small. “As we’re not anticipating any sudden tenfold increases in demand or anything like that, we think it is right to break it up step-by-step and invest gradually.”
Ito said the two companies were discussing details of their investment and would talk about construction plans. He said Panasonic did not expect any other battery makers to put in a competing bid.
Tesla has pledged to invest $2 billion in the factory of the future, and will look to partners for another $3 billion. CEO Elon Musk said that other companies such as suppliers of raw materials will be involved in the project, and that Tesla will break ground on one of two planned locations in June. The Gigafactory is planned to start production in 2017.
Increasing demand for lithium-ion batteries, mainly from Tesla, has been a boon for Panasonic. The two companies signed a contract last October to supply nearly two billion battery cells between now and 2017. Panasonic plans to spend more than 28 billion yen ($275 million) on auto batteries this year. It hopes to be the number-one producer of auto batteries by 2019, bumping aside rival Samsung.