Batteries Tesla Model S EV at the Detroit Auto Show

Published on August 1st, 2014 | by Nicholas Brown


Tesla & Panasonic Finally Sign Lithium-Ion Gigafactory Agreement

August 1st, 2014 by  

You have surely heard of the battery Gigafactory that Tesla Motors wants to build so that it can manufacture lithium-ion batteries on a very large scale. Panasonic, Tesla’s current lithium-ion battery cell supplier, was reportedly unsure about it, as Panasonic saw the Gigafactory as quite “risky.” However, it has now signed an agreement with Tesla on how the two will jointly carry out construction of this factory in the United States, including the roles each will play.

Tesla Model S EV at the Detroit Auto Show

Tesla Model S at the North American International Auto Show (NAIAS). Image Credit: Nicholas Brown (Kompulsa) / CleanTechnica.

According to the agreement, Panasonic Corporation will occupy about half of the planned manufacturing space; manufacture and supply cylindrical lithium-ion cells; invest in the associated equipment, machinery, and other manufacturing tools based on “their mutual approval.” Third-party manufacturers will provide the required precursor materials. Tesla Motors will use the Panasonic cells to assemble lithium-ion battery packs and modules for electric vehicles and stationary applications.

For the time being, Tesla will continue to purchase Panasonic’s Japanese-built batteries so that it can meet its projected demand.

This Gigafactory is intended to not only meet projected electric vehicle battery demand, but to reduce the cost of the batteries via economies of scale due to its high production capacity. This is instrumental in helping Tesla Motors manufacture its highly anticipated, low-cost, and potentially revolutionary Model III vehicle for the masses.

As for Panasonic, this could be a significant source of revenue for its lithium-ion battery business. If this is as successful as Tesla Motors and Panasonic hope it will be, it could lead to cheaper lithium-ion batteries in general, as this innovative new factory will serve as proof-of-concept to the rest of the li-ion battery and EV manufacturers, leading to cheaper vehicles from them, which the electric vehicle industry needs more than almost anything.

JB Straubel, Chief Technical Officer and Co-founder of Tesla Motors, says:

The Gigafactory represents a fundamental change in the way large scale battery production can be realized. 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.

The Tesla Motors press release says that this project can achieve economies of scale that were previously unattainable by li-ion battery factories.

Yoshihiko Yamada, Executive Vice President of Panasonic, adds:

We have already engaged in various collaborative projects with Tesla toward the popularization of electric vehicles. Panasonic’s lithium-ion battery cells combine the required features for electric vehicles such as high capacity, durability and cost performance. And I believe that once we are able to manufacture lithium-ion battery cells at the Gigafactory, we will be able to accelerate the expansion of the electric vehicle market.

This factory is expected to attain production of 35 GWh of lithium-ion cells and 50 GWh of battery packs annually by 2020.

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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:

  • Steve Grinwis

    One lab sample managed energy density on the same order as a car battery. That’s… Really terrible.

  • Roger Pham

    This is very good news for electric mobility and home solar PV, with high quality and affordable battery. The Chevy Volt and Ford Fusion PHEV desperately need these compact, light weight, and floor-mounted Tesla battery to gain market traction, to pull them out of slumping sale figures. The Volt has a pathetically large and ungainly battery pack that takes away one rear passenger seat. Unacceptable!!! The Fusion PHEV is so laddered with battery weight that takes up half of the trunk space yet only has 8 kWh of capacity for a meager 20-mi range…UNACCEPTABLE

    Figure about 15-kWh flat rectangular Tesla pack that can span underneath the two front seats, leaving generous passenger space and trunk space. Completely invisible PHEV battery pack that can be charged 5,000 times! Even if Tesla will charge 100% profit for these packs at $400/kWh, they will still worth every penny!

    I can only hope that GM and Ford will look into this to boost the sagging sales of their PHEV lines, and that Tesla will be kind enough to sell their PHEV battery packs to other OEM’s in order to boost the number of EV’s on future roads.

    • Steve Grinwis

      The voltec pack is huge for the capacity. I don’t understand why it’s so oversized.

      My electric smart car has a 17.6 kWh pack, and they fit that in the gaps between the frame under the car… In a smart car.

      I think it’s because GM used an at the time cheap battery chemistry, instead of a more advanced chemistry like is used in the Smart. Hopefully the next gen battery will have better energy density. The current gen is barely better than a lead-acid.

    • Burnerjack

      What will be interesting is a battery standard that makes swapping/selling/buying/leasing batteries viable. If done correctly, it could turn out that this Tesla/Panasonic endeavor could produce and supply to Ford, GM and others cheaper than their can justify their own production.

  • Kyle Field

    “Tesla Motors will use the Panasonic cells to assemble lithium-ion battery packs and modules for electric vehicles and stationary applications.

    Nice 🙂 You’d think they had enough on their plate…but I’m thankful for this addition 🙂

    • Offgridman

      Musk likes to keep a lot on his plate it would seem since he is also involved with a space launch and home solar installation company.
      By taking back the car batteries that get down to 80-90% of original capacity and reduced mileage and reusing them for home backup it will add value to the individual battery before it needs to be totally rebuilt or recycled. While also giving trade in value to the car owner and making storage less expensive for the homeowner than having to buy brand new batteries. Though there will probably be some that want to buy new ones for their home storage for the warranty and total usability aspects, but the scale of the gigafactory will also make these better priced.

      • JamesWimberley

        Nissan are also looking at this (link). It’s an obvious, necessary and complementary business for any ev manufacturer. It’s more surprising that BYD don’t seem to have made a move yet.

        One of the early strategic moves made by the legendary Al Sloan at General Motors in the 1920s was to support the development of a used car market, a selling point for new buyers.

  • Benjamin Nead

    What isn’t being understood by some here is that there are any number of miracle storage devices that perform impressively in the laboratory today, but are still years from being scaled up to mass production. I know folks who are all gaga about lithium air batteries, solid electrolyte cells or graphene supercaps and – ten or twelve years from now – one or all of those might be the bee’s knees.

    Or maybe it’s something that was invented last week that none of us know about yet. Progress doesn’t stand still very long . . . and there’s been a LOT of energy storage research that was begun in or around 2008 that we’ll be hearing about in the next few years . . . at least the ones that haven’t already proven to be noble dead ends.

    But someone who builds electric cars on a grand scale today can’t wait for what going to be the perfect storage device a decade from now. Panasonic’s lithium-nickel-cobalt-aluminum oxide cells (ie: what the gigafactories will be churning out) meet the criteria for a high energy density and high power density that’s scalable and produceable today. That’s what counts . . . can it be done today?

    • JamesWimberley

      Hear hear. Some people can’t keep two ideas in their heads at the same time, one about the research prospects, the other about technology deliverable today. There will always be something better round the corner. Do we never buy a computer or phone because of this?

      Tesla and Panasonic engineers are not fools and will have given a lot of thought to the possibility of changing to a different battery chemistry some day. The machinery will be designed for flexibility. GM was able to switch refrigerator production lines to machine guns in 1941. The Brits even switched furniture factories to building wooden warplanes (the Mosquito).

      • Bob_Wallace

        Musk has stated that the gigafactory will be designed from the ground up so that it can morph as battery technology changes.

        You start with the best solution available today while expecting there will be a series best solutions, each better than the last.

    • Kevin McKinney

      Absolutely. I was interested to read in The Economist just yesterday about projects actually using super capacitors, though. It mentioned a Toyota-built race-car; a Bombardier-built power-assist unit for locomotives; and Chinese-built ‘trams’. If I read the story aright and remember it correctly, all three are operational (though not necessarily commercial.)

      The technology isn’t approaching the energy-density of Li batteries yet, which (pace the twitching remnants of Chicago Bob’s credibility, from which I am tactfully averting my eyes) is why nobody is trying to use them like Li batteries, as a stand-alone power source. But there is promise to change that in the near future.

    • Ah, sense. Careful sharing that too widely. 😀

  • ChicagoBob

    Manufacture graphene super capacitors and drop the Li-Ion battery in the past where it belongs. If Elon can make a rocket go up he just might make graphene Super cap production real.

    • andereandre

      Siegfried and Roy are working on that. Elon is more of an engineering type of guy.

    • Steve Grinwis

      What exactly is wrong with li-ion batteries?

      • sault

        Maybe it’s that they actually work in the real world and they’re a threat to oil company revenue growth. Therefore, people need to be distracted with unicorn-type technology to keep the gravy train running for as long as possible.

        Either that or people hear about some breakthrough technology (EESTOR…cough…EESTOR…) and think they know better than industry experts concerning which energy storage technology will work given technology readiness levels, market conditions and a whole host of other factors. It’s amazing how all these internet commentators haven’t made billions of dollars shorting Tesla stock or introducing their own vehicle powered by ground-up unicorn horns or something.

        • Steve Grinwis


        • ChicagoBob

          Batteries wear out lithium is very dirty and in general the mechanics of a battery is not for high speed charge and discharge. From reading what scientists say, and most of them are truth benders at best and con men at worst, the new graphene caps and ways making them make them as powerful as a battery without the bad side.

          • sault

            “Batteries wear out lithium is very dirty and in general the mechanics of a battery is not for high speed charge and discharge.”


            “From reading what scientists say, and most of them are truth benders at best and con men at worst…”


          • DGW

            Faux Nooze?

          • No way

            Lithium is very dirty? That’s the strangest thing I’ve read in a while.
            In what way is it dirty? And what are you comparing to when calling it dirty?

          • Bob_Wallace

            ” From reading what scientists say, and most of them are truth benders at best and con men at worst,”

            You probably don’t realize what people learn about you when you make a stupid statement like that.

          • Steve Grinwis

            Lithium is an element. That’s mined as a salt. And we have lots of it, at that one mine in south america somewhere… enough to make 10’s millions of electric cars.

            And scientists are con men, but you want us to abandon working successful technology, for vaporware?

            This’ll be fun.


          • ChicagoBob

            What do you do with it when it’s time to toss it away?
            This is only one of many many articles on the problem of li ion batteries.
            As for scientists… AHEM..
            Do anyone of you listen to what scientists say? In 5 years, in 10years.WELL I have heard that song and dance for over 30years.
            It’s a joke every time I read a break through..
            If you read the engineering trades batteries are not making fast advances. Cost may be going down but energy density and the ability to recapture energy wasted when breaking has not moved.
            Again graphene is amazing stuff.
            Do some reading graphene super capacitor.
            Ps. I was not even going to bother to reaspond but then I thought you should hear the other side.

          • Doug Cutler

            “As for scientists… AHEM..
            Do anyone of you listen to what scientists say”

            This from a man posting on a medium which is itself a product of scientific genius.

          • No way

            *lol* that was the worst attempt ever at trolling… Tesla are building a recycling section in their giga factory. A used Tesla battery pack for a car has still a lot to give as energy storage and then is 100% recyclable.

            There are a lot of things that might be dangerous when not treated properly. But you know, electric car batteries are not put one by one in a bucket, they are fixated in a battery pack built for safety and to withstand a lot of outer force and damage if needed.

            Tesla are shiping thousand battery packs every month and will be able to ship them back too.

            “Energy density has not moved”… why are you making things up?

            The car companies are keeping track of new technology. And if it looks remotely viable they will surely try and test is and see if it’s usable in a future car.
            Lithium is now and for the future. Graphene or other solutions might be for the even further future.

          • Steve Grinwis

            What do you do with an incredible value resource when it’s lifespan is ended….

            You recycle it.

            I’ve read about graphene super capacitors… A one off labratory specimen managed to eek out 65 watt-hours per Kg. That’s… basically terrible. That’s lead-acid battery territory. Like… Ouch. Pretty much completely unusable. Worse than the first gen commercial li-ion batteries at 75 watt-hours.

            The ironic / cognitive dissonance moment of all of this, is that you put aside your weird issues with scientists who claim improvements in Li-Ion design, and trust OTHER scientists who claim that graphene is going to make massive gains.

            Like… one of these is a real, shipping product, and the other of these is laboratory vaporware. But, no, we’re to believe you that the vaporware that cannot compete on price, energy density, or level of commercialization is the way to go. Please… That’s what you’re going to go with?

            As for the ability to recapture wasted energy when braking, I’m not sure what you’ve been reading, but my car is more than capable of charging at somewhere north of 30 kW when braking. The net result is that the only time the brakes are engaged is during a panic stop, or during the last little bit of braking, when the generator isn’t spinning fast enough to do anything useful anymore. Li-Ion batteries are *GREAT* at this. Very efficient. And as battery packs get larger, their ability to regen scales linearly. We’ve got this one covered.

            Furthermore, Li-Ion batteries aren’t improving? Have you been paying attention??


            Check out that image. Do you really call that a flat slope? And it extends up to 265 watt-hours with current state of the art… no sign we’re slowing down yet either, but, hey, let’s not involve ‘science’ in our discussion of real world improvements in performance. After all, no improvements have been made, right?

          • djr417

            Thanks for the laughs. its hard to beat an uninformed grammatically challenged troll.

          • jeffhre

            “…lithium is very dirty,” the chairman of BYD gives demonstrations by drinking the electrolyte in his Li Ion batteries. Not sure what the reference to dirty is. Please elaborate.

    • Matt

      As soon as someone makes a SC that holds twice the change in half the weight, and 1/4 the volume; for half the cost. People will beat a path to their door. But while we keep hearing stories, no one have delievered yet. 🙁
      And of course batteries better every year so its a moving target.

      • ChicagoBob

        I agree but battery energy density has not been growing yearly. My hope is Elon can be the savior here and make that process real and push tech farther

        • sault

          ” I agree but battery energy density has not been growing yearly.”


          I’m noticing a trend here with your unfounded claims…

          • No way

            Especially since the 18650 have been improving battery energy density by about 33% since the Tesla Model S started selling.

          • Matt

            As market for batteries grows, more people spend money to make a better battery cheaper. Because they want a bigger piece of the bigger pie.

          • No way

            True. The total world wide lithium battery market will be 10 times larger than today in just a decade. Billions and billions of dollars invested by one of the largest industries in the world, the auto industry.
            And there will probably be other industries interested in investing some money too, like the aviation industry and energy storage industry.
            To not expect the price to go down fast and a lot of improvement in chemistry, energy density etc. would be pretty stupid.

        • Steve Grinwis

          And… why is energy density a problem? We can build a car that’ll go 500 km. Energy density isn’t the problem.

          Cost is the problem. Give me a cheap enough modern battery, and I’ll cram enough of them into your car for you to drive it hundreds of km…

          And guess what? Battery prices are dropping so fast, it mind as well be falling off a cliff. $1400 / kWh to $400 / kWh (or less) in 5 years. 5 years from now, it’ll probably be sub $200.

          • ChicagoBob

            Because we have more needs than caring you and a bag of groceries. Families of 5 or more would kill most of the batteries and the weight of then in general for the power they produce is a joke. Google kwh of 1 gal of gas. Measure that against a battery pack. Typical battery packs are 10kwh because of cost.

          • Offgridman

            Maybe it is because it was done wrong, but doing a Google as you suggested brought up more than half of the answers being how much electricity it requires to produce that gallon of gas. Which to me is a totally ridiculous waste, if that power had been put directly into an EV I would be many miles down the road.
            While Tesla has been making the incremental improvements to get us even further down the road, and if you had read the article the gigafactory will provide the economies of scale to make those batteries even less expensive.
            When the super capacitors are actually commercially viable at a cheaper price than batteries well then of course they will be the power source of choice. But for you to say that for now we shouldn’t buy the lithium powered vehicle that will get us more than 250 miles down the road but keep on burning the gas that is wrecking our world while we wait for those super caps is equally ridiculous.

          • sault

            “Families of 5 or more would kill most of the batteries…”

            Well, the Tesla Model S has seating for seven people and nobody who owns one has “killed” their battery by driving around with a full car.

            “…the weight of then[sic] in general for the power they produce is a joke.”

            IDK, with the Model S able to go from 0 to 60 mph in 3.9 seconds, I don’t think anybody is laughing at your joke…

            “Google kwh of 1 gal of gas. Measure that against a battery pack.”

            So what? Since an electric car is 4 – 5 times more efficient than a gas car, what does this have to do with anything?

            “Typical battery packs are 10kwh because of cost.”

            Wow, are we living in the same reality, you and I? You do know that the Nissan LEAF has a 24kWh battery pack, right? Are you even trying to stay informed with basic facts or do you just listen to the anti-EV echo chamber all day?

          • ChicagoBob

            I live in the! Midwest you did hear we get cold and those batteries list most of their performance making them unreliable. The leaf dropped almost 40% of is mileage. And if you drive on the expressway the leaf won’t make 70miles. I have kept up. Tesla can carry everyone but not as far.
            Don’t get me wrong I love the idea but so far it’s just not even close.

          • Bob_Wallace

            The Leaf has a 70 mile highway range at 55 MPH. Driving faster cuts range.
            The workaround for cold is to pre-heat the batteries while plugged in. As the car drives, the batteries discharge and gives off heat. Pre-heating should not be hard concept for someone who lives in the Midwest. Block heaters and light bulbs under the hood for the oldest of us.

            Range could be a problem if one needs to park outside all day long with no place to plug. On one of those days when the high for the day is 5F. Volvo has a solution for that. A small ethanol heater that warms both batteries and passengers.

          • sault

            Wow, you just keep ignoring the points I bring up only to constantly change your story, going from one thing to the next. You’re not making a coherent argument.

          • So much misinformation, so little time…
            But just on that last point, you do know that Top Gear staged the car running out of battery, right? They even admitted it. It was all just for entertainment. Meanwhile, one of the hosts has now gone and chosen a BMW i3 as his main car….

          • Steve Grinwis

            Typical battery packs are actually in the 16 kWh to 24 kWh with the current range of electric cars.

            So no, you’re wrong again. Enough that I think you’re just lying through your teeth. Either that or you’re just horribly misinformed. It’s hard to think it’s not intentional at this point.

            And that’s only if we ignore Tesla with 60 kWh to 85 kWh worth of battery pack, good for hundreds of KM’s of driving, with large payloads.

            The Tesla S85 can go 375 km on a charge, in the dead of a Norweigian winter, full of crap to the brim. Like, I think over 1000 lbs of stuff in it. I know that, because some guy did it, last December, and made a video of it.

            See here:

            You have lots of unfounded claims. Yet to see anything remotely interesting coming from you.

            It doesn’t matter how much energy is in a gallon of gas. What matters is how far I can go on a charge. And that’s about 130- 140 km.

            Please, go learn anything about the electric car revolution currently taking place, with exponential growth, then come back and talk.

    • AltairIV

      We need to understand that supercapacitors are NOT batteries, and are not necessarily interchangeable with them. Supercaps have high power density but low energy density, which is pretty much the inverse of batteries. This means that they are used primarily for short-cycle applications where you don’t generally need to store a lot of energy, but you do need to be able to charge and discharge it fast and often. They are often used, for example, as buffers and load-levelers for battery storage, say to capture the output of regenerative braking before sending it on to the main battery for large-scale, long-term storage.

      Note particularly how Li-ion batteries have 10-20 times the density of even the best supercapacitors (which are themselves Li-ion hybrids and pseudocapacitors). SCs, on the other hand have power densities several times higher than batteries and longer lifespans.

      in short, batteries and superconductors are complementary technologies, not competing ones. There is need for both of them on the market.

      Perhaps in the future we will have inductive charging roadways or similar and the heavy batteries now used in cars can be replaced with smaller, lighter supercaps. But we’re a long way from that point yet. They are, however, already finding use in buses and trains and such, where the electricity for charging can be frequently and predictably supplied.

    • ThelmaCHiser

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    • ThelmaCHiser

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