Published on April 5th, 2014 | by Nicholas Brown


Panasonic Unsure About Tesla’s Gigafactory

April 5th, 2014 by  

Originally published on Kompulsa.

Panasonic, a major manufacturer of batteries, is reportedly hesitant to join Tesla Motors’ Gigafactory project because it would raise investment risks, according to Panasonic’s CEO Kazuhiro Tsuga.

Tesla Model S Drivetrain. Image Credit: Kompulsa.

Tesla Model S Drivetrain.
Image Credit: Nicholas Brown / Kompulsa.

“Our approach is to make investments step by step,” Tsuga said yesterday. “Elon plans to produce more affordable models besides Model S, and I understand his thinking and would like to cooperate as much as we can. But the investment risk is definitely larger.”

I don’t blame them for being cautious, as this is a very large project. It is expected to cost $5 billion! (Tesla has already raised $2 billion of that). On the other hand, sometimes big risks result in big rewards.

If this project succeeds as Elon Musk hopes it will, it could reduce lithium-ion battery manufacturing costs, making them more feasible for electric vehicles and home energy storage. It would also enable Tesla to manufacture hundreds of thousands of electric vehicles annually. To top it off, the success of this project could provide peace-of-mind to others who are interested in pursuing similar projects, leading to more large-scale factories that produce low-cost lithium-ion batteries.

Those are big rewards!

Source: Bloomberg

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About the Author

writes on CleanTechnica, Gas2, Kleef&Co, and Green Building Elements. He has a keen interest in physics-intensive topics such as electricity generation, refrigeration and air conditioning technology, energy storage, and geography. His website is:

  • Altair IV

    Panasonic has had a rather rough time recently. They’ve always been a conservative company, but the last few years have been very difficult for them and they are just now starting to come out of it.

    They’ve just finished a major restructuring, shifting their main focus more to B2B than B2C, closing down unproductive divisions and consolidating others, and have had to lay off a large number of people, something that Japanese companies aren’t used to doing.

    So it’s no surprise that they are being very cautious here. Unfortunately I think this is exactly the kind of thing they need to jump into with both feet, if they want to be part of the next boom.

  • anderlan

    So, that last big ‘reward’ is actually a possible downside for Panasonic, depending on how quickly said competing factories get online. Definitely an upside for consumers and humanity, though, any way it happens.

    “To top it off, the success of this project could provide peace-of-mind to others who are interested in pursuing similar projects, leading to more large-scale factories that produce low-cost lithium-ion batteries.”

  • J_JamesM

    I wonder if factories like this would be able to sufficiently adapt to ever-improving battery chemistries and tech?

    • Wayne Williamson

      J_J, my guess is no. But then again the purpose of this factory is to produce large quantities of a known process, with gains made in automation and scale. Better batteries/supercaps should always be pursued, but why shouldn’t a great tech replace all other existing batteries as is. Why are we still buying a 40lb lead acid battery to start an ice car. Why are we still buying alkaline batteries to power a flash light. etc, etc, etc….

      • Bob_Wallace

        ” Why are we still buying alkaline batteries to power a flash light. etc, etc, etc….”

        It’s rechargeable time. They work fine.

        My strategy is to get charger that handles everything from AAA to D and 9 volt. Buy a few more than I need for all the stuff. When something needs a refreshing I’ve already got charged ones ready to go. Stick in the charged, put the old in the charger.

        • Benjamin Nead

          Those rechargeable AAA-to-D size consumer device batteries are probably nickel metal hydride (NiMH) and not alkaline, Bob . . . same physical size as the old single-use alkalines, so they’ll fit inside our legacy devices (to answer Wayne’s question) and with just smidgen less voltage (1.2V per cell vs. 1.5V.) You might come across an occasional gadget that has a particularly narrow parameter DC-to-DC chip inside that absolutely has to see exactly 1.5V and won’t work with 1.2V (certain TV remotes,) but this is rare today.

          It was less than a decade ago that almost nobody used consumer-sized NiMH rechargeables, because the ones of that generation would self discharge in a matter of days. Sanyo’s Eneloops came along with their low self discharge formula (charge ’em and they’re ready to go for 9 months or more, not just a couple of days) and that changed everything overnight. All the other major brands (Eveready, Duracell, Rayovac, etc,) now also have similar low self discharge technology and you can find them everywhere. I haven’t bought single-use AA and AAA alkaline cells for my household gadgets since 2007.

          Be advised, though, that the C and D cell rechargeables you’ll typically find in the Big Box store checkout aisle may simply be AAs stuck inside a larger tube. If the amperage rating of a rechargeable C or D cell isn’t any better than the AA ones hanging right next to them (ie: around 2100mAh,) leave them on the shelf and go online to order the Maha ones. Their C and D size NiMHs put out, respectively, a whopping 5000 and 9500mAhs per cell . . .

          The 9V stuff doesn’t translate to rechargeability in NiMH chemistry very well. 8.4V (1.2V X 7=8.4V vs. 1.5V X 6=9V) might not even run some devices and the 250mAh capacity that even the best NiMH “9 Volt” battery is putting out is pretty meager. I’ve heard a lot of good things about these lithium iPower ones but, since I have almost nothing in my house that needs a 9V cell, I haven’t tried them yet . . .

          The BMS chip (needed for any protected lithium cell) inside this one is probably calibrated for an even 9V and the 520mAh capacity is about on par with the the throwaway alkaline ones.

          As for why we still use sealed lead acid (SLA) car batteries, well . . . good question! SLAs are amazingly durable in regards to temperature extremes and rechargeable, of course. When its time to replace them, something like 95% of a SLA unit can be recycled, so they’re surprisingly green.

          Today’s production lithium cells still have problems at temperature extremes, which is one reason that large packs inside EVs have thermal management systems surrounding them. A lithium pack that is the near equivalent of a car starter battery (say, around 12v @ 30Ah) will certainly be smaller and lighter than the equivalent SLA. But, if you have to encapsulate just that one starter battery into it’s own thermal management enclosure, with water or air circulating around it, you’ve almost certainly negated any size and weight advantage you would have had with just keeping the old SLA under the hood . . . and the SLA is going to be cheaper as well. So, this is why you still see – for now – SLAs running the 12V accessories under the hood of mainstream EVs like Nissan Leafs.

          That said, I bought a lithium iron phosphate (LiFePO4)
          motorcycle starting battery a couple of years ago that is built around A123 cells . . .

          This particular lithium chemistry is more forgiving to heat than most other lithium types and with only marginally less power density. Because this particular one in a pretty clear plastic box, it makes a beautiful tabletop display when our local EV club is hosting a public event. But, yeah, it’s not cheap.

          As to why nobody uses a larger format NiMH battery to crank an internal combustion engine starting motor, this may have something to do with it . . .

          Other SLA replacement car starter batteries could be built around Nickel Zinc (NiZn) chemistry . . .

          . . . but the rub with these is that the number of charger/recharge cycles isn’t as good as NiMH or SLA.

          Still, with 1.6V per cell, they pack a good punch for their size. The Powergenix folks also makes a AAA and AA size cell for home gadget use. I’ve used these and, in some applications where a 1.2 isn’t quite enough voltage, they do well.

          I know that supercapacitor replacements for car starting batteries have promise. But quick self discharge is an issue and supercaps almost always need to be mated to a true chemical battery to work in an application like this. We then start to get back to cost and a diminishing size advantage.

          • Bob_Wallace

            The NiMH batteries of 2000 were less than stellar. Not only did they have a bad self-discharge problem, they also needed to be completely discharged and recharged from time to time.

            I’ve been very happy with Enloops. I’ve also been using Tenergy batteries (Amazon sells) which seem as good and sell for less.

            I’ve found nothing so far that the 9 volts won’t run. They’re great for my drip system timers.

          • Benjamin Nead

            Ah, yes, but backyard drip irrigation timers are not going to be drawing very much current. Put your NiMH 9V cells (which, remember, are only 8.4V at best and at about a tenth of the amperage of your 1.2V AA Eneloops or Tenergys) into a wireless microphone and see how quickly they discharge.

            Those devices can kill off a pair of better quality high amperage (ie: Energizer or Copper Top) alkaline 9Vs in the course of an evening. This is where the lithium 9vs really shine. 4 cells and a charger is about a $100 investment. But if you’re doing that sort of work several nights a week and burning up 2 or 3 disposables on each concert, it pays for itself in about a week or so.

            By the way, a comprehensive article regarding the charging of NiMH cells (far more finicky than lithium) can be found here . . .


            Not only are NiMH cells of today much better that they were at the turn of the century, Bob, the chargers themselves (even relatively inexpensive $20 ones that hold 4 AA/AAA cells) have also improved greatly.

          • Altair IV

            Rechargeable battery life has certainly come a long way in the past few years. I recently figured this out for myself and have since switched almost all of my battery powered devices to rechargables, even ones that would in the past not be considered appropriate due to high self-discharge rates, like remote controls. I couldn’t be happier.

            All but one of my AA and AAA sets are Panasonic Evolta rechargables. Their highest-capacity 2500mAh is listed as maintaining a 65% level after 1 year (lower capacity ones have better percentages). While I do have to replace/recharge them more often than with the old alkalines, one surprise benefit for me has been that I no longer feel compelled to wait until the battery is almost dead before replacing it. As soon as the device starts to show symptoms of weak batteries I can just top them off.

            Full disclosure: one of my employers is part of the Panasonic group and I receive a substantial amount of my income from them, but I’m not boosting their batteries just because of that. Indeed, I noticed a few months ago that the newest top-of-the-line Toshiba Impulse appears to have even higher capacity and lower self-discharge numbers than the Evolta, so you may be interested in checking them out as well.

          • Benjamin Nead

            I note below, Altair, you outlined the corporate downsizing story of Panasonic. Before they did this, I think I remember hearing that they bought up Sanyo a year or two ago. So, your Evolta cells are sharing the same fine lineage of the Eneloops. It will be interesting to see if Panasonic will continue to offer both Evolta and Eneloop brands simultaneously or if one of them will disappear in time.

            The distinctive plain white jacket on the Eneloops clues in others in the household that these are not ordinary disposables, where almost all the other competing brands require a somewhat careful reading of the label, since they don’t look all that different from alkalines (my son, a preteen almost a decade ago, mistakenly consigned a set of green jacket Rayovacs NiMHs to the trash bin, since they weren’t the “special” white ones I had told him about.) This easy-to-spot white label on the Eneloops was particularly critical early on here, when we still had a mixture of different types inside our gadgets and most were still disposables.

            Thanks for the tip on the Toshiba Impulses. With about 40+ rechargeable low self discharge NiMH AA and AAA (most are Eneloops) now in just about everything in the house that takes those sizes, I’m simply running them through their promised 1000 to 1500 lifetime charge cycles and not needing to buy any more right now. In a few years, when the early purchase Eneloops finally stop holding a charge, my guess is that I’ll be pleasantly surprised as to what’s out there to replace them.

            Open note to Panasonic and Tesla: shake hands and get going with the gigafactory. Oh, yeah . . . build it in Tucson.


  • Pat Campbell

    If Panasonic has been asked to be a partner in this then the idea needs to be vetted as something that would be more than likely to be successful and profitable to the owners (shareholders). When you are talking a several billion dollar investment you need more than our shared EV enthusiasm; you need a very rational, fact based, results certified plan. Otherwise you could bring Panasonic … and TESLA down…

  • wattleberry

    Or does this reflect some caution on the adaptability of the Tesla plant to new developments, like VW’s? Obsolescence-proofing has to be the key to survival in this volatile industry.

  • dbr2

    I assume Panasonic’s comment reflects a negotiation in progress. I don’t think we really know what term’s and business risks they are being asked assume.

  • Offgridmanpolktn

    This is ridiculous, a simple search shows that Panasonic has their own battery production plant and signed a contract with Tesla to supply them over the next four years. Along with their multi million dollar investment in the Tesla company themselves. They didn’t seem to show any concerns about ‘step by step’ investments at that time.
    What has happened is they have finally realized that the gigafactory will not only mean the loss of Tesla battery needs, but also serious competition in the world market with Tesla able to source their mineral needs in this country at a lower cost than what Panasonic can find on the world market. So Tesla will be able to compete right from the start with current tech batteries not just in the future with improved ones.

    • Bob_Wallace

      I would assume Tesla has a licensing agreement with Panasonic that lets them use Pana battery tech.

      I would think that if Pana doesn’t buy into the new plant then Tesla could easily jump to a new technology if something better comes along and leave Pana behind. Tesla is talking about a market that will absolutely dwarf laptop and cell phone batteries. Seems like Pana would be foolish to not own a piece of it.

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