TOKYO -- Tesla Motors Inc. and Panasonic Corp. have agreed to cooperate on the construction and operation of the American carmaker’s so-called gigafactory, its envisioned large-scale battery manufacturing plant in the United States.
Under the plan, electric vehicle-maker Tesla will provide and manage the land and buildings; Japanese electronics giant Panasonic will outfit the factory with machinery and manufacture the cylindrical lithium-ion battery cells.
“The Gigafactory is being 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 companies said in a joint statement.
Both partners will continue negotiating such details as sales and investment. The companies did not give any updates on where the plant might be located.
Tesla will take Panasonic’s gigafactory cells and assemble battery modules and packs for electric vehicles, including its upcoming Model 3 sedan, the companies said. The Model 3 will start at $35,000 -- about half the starting price Tesla’s flagship Model S sedan.
“Not only does the Gigafactory enable capacity needed for the Model 3 but it sets the path for a dramatic reduction in the cost of energy storage across a broad range of applications,” Tesla Chief Technical Officer and co-founder JB Straubel said in the release.
Panasonic Executive Vice President Yoshihiko Yamada said the gigafactory will help cut battery manufacturing costs and “accelerate the expansion of the electric vehicle market.”
Tesla has said the proposed plant could cost as much as $5 billion to build and employ as many as 6,500 people by 2020. The company run by CEO Elon Musk is studying sites in states including Arizona, New Mexico, Nevada, California and Texas.
Panasonic ranks No. 23 on the Automotive News list of the top 100 global suppliers with worldwide sales to automakers of $8.3 billion in its 2013 fiscal year. The company supplies a variety of automotive components, such as premium audio equipment, navigation systems, batteries, and sensors.