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.
“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!
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