My affinity with the Panasonic USA has been for years. Since they connected with Tesla Motors I’ve been all in. Yet, when they began to create the Gigafactory, I was sold. So the Tesla Gigafactory is the battery plant building a gigawatt of batteries for the Model 3. This extremely large production of EV batteries reduce operating costs. This reduces the cost to you (buyer) by dropping battery costs per pack.
Now with the release of the Tesla Semi and the Roadster (not including the Model 3), battery purchases are gong to increase, the volume will go up and potentially further reduce the cost of each product.
According to the agreement (as I wrote back in 2016):
Tesla operates the building and Panasonic USA goes all in on making the lithium-ion cells. This includes:
• Panasonic invests in the associated equipment, machinery, and other manufacturing tools.
• Tesla takes the cells and other components building battery modules and packs. To meet the projected demand for cells, Tesla will also continue to purchase battery cells produced in Panasonic’s factories in Japan.
• Tesla and Panasonic USA will continue to discuss the details of implementation including sales, operations and investment.
With the Gigafactory online today plus it’s ramp up, expect the cost of battery cells to significantly decline. By bringing down the cost of batteries, Tesla can make products available to masses quicker than any other car company.
The Gigafactory is being built in phases so that Tesla, Panasonic, and other partners can begin manufacturing immediately inside the finished sections and continue to expand thereafter. Tesla has a phased approach allowing them to learn along the way continuing to drive down the cost of energy storage. Already, the current structure has a footprint of 1.9 million square feet, which houses 4.9 million square feet of operational space across several floors. And we are still less than 30 percent done.
Once complete, we expect the Gigafactory to be the biggest building in the world.
Finally, bringing cell production in the U.S. allows Tesla to create “thousands of American jobs”. In 2017 alone, Tesla and Panasonic hired several thousand local employees. At peak production, the Gigafactory will employ 6,500 people. This doesn’t even include indirect jobs created. Expected numbers are between 20,000 to 30,000 additional jobs throughout the area.
A world leader in EV batteries
Tesla’s Model 3 is a smaller, simpler and a more affordable electric car. Designed and built as the world’s first mass-market electric vehicle, it is a critical step in Tesla’s mission to accelerate the world’s transition to sustainable energy
Driven by the rise of:
and energy storage businesses,
the world now finds itself at the beginning of a lithium super cycle that is all about securing new supply.
As OilPrice.com reports:
We have Tesla in the far corner, building its battery gigafactory in Nevada, for which it needs tons of lithium at a reasonable price.
Tesla announced plans for the Model 3 (which has already hit over 400,000 pre-orders). To give you an idea of just how meaningful this is, Tesla used to produce less than 50,000 cars per year. Elon Musk mentioned during the unveiling that Tesla will be “gobbling up much of the world’s lithium supply with plans to produce 500,000 EVs per year….to produce a half million cars per year…we need basically to absorb the entire world’s lithium-ion production.” Remember – this is one man, one company. Tesla’s soon-to-be-completed gigafactory will produce more lithium-ion batteries than the rest of the world combined.
Even we didn’t have battery gigafactories, Powerwall and this energy storage revolution, then add streets lined with electric cars—demand for lithium would still remain steady just to keep up with consumer electronics.
Goldman Sachs predicts that for every 1 percent rise in EV Sales, lithium demand will rise by 70,000 tons per year. Furthermore, Goldman Sachs predicts that the lithium market could triple in size by 2025 just on the back of electric cars.
So as I tweeted before:
”When Tesla Motors needed to reduce battery costs and bring an affordable Model 3 Electric Car to market: Who did they call? Panasonic USA”
This post was sponsored by Panasonic USA #PanasonicMovesUs
Source of all photos from Tesla Motors.