Published on January 8th, 2016 | by James Ayre


Panasonic Putting $1.6 Billion Into $4–5 Billion Tesla Gigafactory

January 8th, 2016 by  

Originally published on EV Obsession.

The partnership between Panasonic Corporation and Tesla is set to continue for the foreseeable future, based on comments recently made by the company’s President Kazuhiro Tsuga at the Consumer Electronics Show.

The company will reportedly be putting up to $1.6 billion into the “Gigafactory” being developed in concert with the noted electric vehicle (EV) manufacturer, according to Tsuga.


Considering that total project development costs for the Gigafactory are expected to be somewhere around $4–5 billion, the chunk being fronted by Panasonic is really quite significant — showcasing how serious the Japanese company takes Tesla’s goals/projections.

“We are sort of waiting on the demand from Tesla,” stated Tsuga. “If Tesla succeeds and the electric vehicle becomes mainstream, the world will be changed and we will have lots of opportunity to grow.”

Market Watch provides more:

The battery investment is one element of Osaka-based Panasonic’s drive to become a major auto parts supplier, taking advantage of the computerization of the automobile and forecasts for robust global demand for light vehicles in coming decades. While its trade show exhibit still features lots of TVs and cameras, it also showcased its advanced electronics for cars and the home. Mr Tsuga is counting on the proliferation of the small screens in automobiles, for instance, to make up for the slowdown in traditional TVs.

“The car is changing,” he said. “It is getting to be an electrical object. We have those technologies, so I thought ‘we need to shift our resources to automotive’.”

Panasonic’s sales to auto makers are expected to nearly double over the next four years. This fiscal year, it is expected to contribute Yen1.3 trillion ($11 billion), about 15% of the company’s revenue, but will grow to nearly 25% of revenue by the end of the decade. Panasonic aims to increase annual revenue to Yen10 trillion by its fiscal year ending in March 2019. That is up from roughly Yen8 trillion for its fiscal year ending in March.

Big plans. As Tesla’s are as well — the company is aiming for sales of 500,000 vehicles a year by 2020 after all. No wonder the two companies have developed what seems like such a solid partnership. These two corporations are some of the only major companies taking the transition to electric vehicles very seriously.

Panasonic and Tesla signed an official agreement regarding the Gigafactory in July 2014.

(Tip of the hat here to “FlasherZ” on the Tesla Motors Club forum for sharing this news.)

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About the Author

's background is predominantly in geopolitics and history, but he has an obsessive interest in pretty much everything. After an early life spent in the Imperial Free City of Dortmund, James followed the river Ruhr to Cofbuokheim, where he attended the University of Astnide. And where he also briefly considered entering the coal mining business. He currently writes for a living, on a broad variety of subjects, ranging from science, to politics, to military history, to renewable energy. You can follow his work on Google+.

  • Jim Smith

    Is Tesla still on target to start battery production later this year?

  • OneHundredbyFifty

    Panasonic knows a good thing when they see one. Even if gas prices stay low and the break-out for EVs is delayed for a few years the scale of the gigafactory will drop prices opening new markets. On huge one that will open up is for standard car batteries. Li-ion is far superior to lead acid. The cost of batteries from the GF will be competitive and disruptive in the starter battery space.

    • Matt

      Interesting link, I had not thought about replacing”normal” starter batteries.

  • Shiggity

    One factory to rule them all.

    • Matt

      One factory as a template for many more to come.

      • mikeswift

        Yes. If this factory can supply enough batteries for 500,000 cars, and if we want all of the new cars in say 2025 to be electric we would need another 33 factories just like this one! And thats not counting the ones needed for PowerWall, and PowerBlock production.

  • Martin

    Does anybody know why the different colored section of the roof and when are they planning to start installing the PV (not until they need power, could use power right now for the building process).

    • Anthony C

      Just a guess but the white might be a moisture barrier material. Can’t see from picture but the grey might be the concrete, or maybe some sort of gravel type stuff I’ve seen on roofs. For the PV, I’d assume they don’t use a huge amount of power right now and what they do use they can get from grid. They probably don’t see a need to rush until they really start needing a ton of electricity. I do find it odd that I haven’t heard of them starting to throw up windmills but they might still be trying to figure out if they’ll need more buildings around there first.

      • Martin

        The other picture, the closeup with the people standing on the roof, that light part looks like it may be finished.( don’t know if it is concrete or steel, do not think it is gravel).

        • ROBwithaB

          Where did you find a closeup picture?

      • neroden

        I think it’s probably a matter of priorities and financing. Tesla is voraciously consuming finance capital, so I suspect they’re trying to get a “zero down” PPA-type deal for the solar panels and the windmills rather than using their own capital.

      • Pat Campbell

        Maybe they do need a huge amount of power and are going to stick it to the Nevada Public Utilities Commission to provide that power through new transmission line and power plant approvals to provide that power rather than go the solar panel route. Now we will see if they change their perspective on grid tied solar power ….

        • ROBwithaB

          Well, they’ll have no shortage of batteries to backup their solar generation.

        • mikeswift

          I would suspect that solar panels will not be going on the roof until the plant is operational. Tesla desperately needs battery output from their factory. Solar panels are just to reduce the cost of electricity for the plant, and I suspect that Solar City will be suppling the system. As far as pat’s comment about sticking it to the independent power company, you have to remember that the plant has to work 24, 7. Where is the power to come from on cloudy days, and when they are running three shifts? No, from day one their power was to come from the independent power company. Solar was just to reduce the total amount of power purchased.

    • ROBwithaB

      The white looks like it’s been painted on and might actually be… paint?

      And why is only some of the roof done? Well, when last did you tackle a paint job of a few million square feet? Unless they’ve devised some sort of giant robot that I’m not aware of, the way to do it still involves guys with rollers.
      It looks like a first coat has been applied to the one quarter of the roof in the top of the picture, and the bottom quarter has a second coat and parts of it top-coated too.

      Grey bits might indeed still be raw concrete. The black is probably a bituminous waterproofing layer. The little white “cigarettes” lying on the black part would then probably be rolls of absorbent stretchy fabric that reinforce the soft bitumen to hold it together. The waterproofing layer is a two-part “matrix”, much like GRP.

      The white is probably something formulated with additional waterproofing properties, but would also also very effective at reflecting solar radiation. Useful in the
      desert, to reduce cooling costs inside. Also useful to protect the underlying bitumen from degradation due to Ultraviolet from the sun.
      Also, the white just looks super cool. Until they put the panels up…

      But don’t quote me. All of this just an educated guess, as an industrial property developer. (Order of magnitude smaller than the area shown here, but I still know something about roofs. Not enough though. You can never know enough. Especially about roofs… )

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