OSAKA, Japan / PALO ALTO, USA, July 31, 2014 – Panasonic Corporation and Tesla Motors, Inc. have signed an agreement that lays out their cooperation on constructing a large-scale lithium-ion battery manufacturing plant in the United States, known as the Gigafactory.

According to the agreement, Tesla will even more prepare, offer and manage the land, buildings and utilities. Likewise, Panasonic will manufacture and supply cylindrical lithium-ion cells. Also they are investing in the associated equipment, machinery, and other manufacturing tools based on their mutual approval.

As a result, a network of supplier partners planned. Planned to produce the required precursor materials. So Tesla will take the cells and other components to assemble battery modules and packs. Therefore to meet the projected demand for cells, Tesla will continue to purchase battery cells produced in Panasonic’s factories in Japan. Similarly, Tesla and Panasonic will continue to discuss the details of implementation. Therefore including sales, operations and investment.

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The Gigafactory created to enable a continuous reduction in the cost of long-range battery packs in parallel with manufacturing at the volumes required to enable Tesla to meet its goal of advancing mass market electric vehicles. The Gigafactory managed by Tesla with Panasonic joining as the principal partner responsible for lithium-ion battery cells and occupying about half of the planned manufacturing space; key suppliers combined with Tesla’s module and pack assembly will comprise the other half of this fully integrated industrial complex.

As a result, cost reductions achieved through optimized manufacturing processes driven by economies of scale before unobtainable in battery cell and pack production. Further price reductions achieved by manufacturing cells that optimized for electric vehicle design, both in size and function, by co-locating suppliers on-site to end packaging, transportation & duty costs and inventory carrying costs, and by manufacturing at a located lower utility and operating expenses.

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The Gigafactory will produce cells, modules and packs for Tesla’s electric vehicles and for the stationary storage market. The Gigafactory planned to produce 35GWh of cells and 50GWh of packs per year by 2020. Tesla projects that the Gigafactory will employ about 6,500 people by 2020.

Sources: Panasonic and Tesla Motors

Tesla Panasonic gigafactory create lithium-ion battery cells

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