Tesla And Panasonic Announce Definitive Agreement On $5 Billion Gigafactory Deal

With a name like "Gigafactory," it has to be good. Panasonic and Tesla have just announced an agreement that'll see the two firms construct a large-scale battery manufacturing plant right here in the United States. The name, as you'd guess, is Gigafactory. Bold, intriguing, and totally Tesla. Per the agreement, it'll be Tesla managing the land, buildings, and utilities, while Panasonic will manufacture and supply cylindrical lithium-ion cells and invest in the associated equipment, machinery, and other manufacturing tools based on their mutual approval.

Per Tesla: "Tesla will take the cells and other components to assemble battery modules and packs. To meet the projected demand for cells, Tesla will continue to purchase battery cells produced in Panasonic's factories in Japan. Tesla and Panasonic will continue to discuss the details of implementation including sales, operations and investment.

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 Gigafactory will be managed by Tesla with Panasonic joining as the principle partner responsible for lithium-ion battery cells and occupying approximately half of the planned manufacturing space; key suppliers combined with Tesla's module and pack assembly will comprise the other half of this fully integrated industrial complex."

The Gigafactory will produce cells, modules and packs for Tesla's electric vehicles and for the stationary storage market, with current plans to produce 35GWh of cells and 50GWh of packs per year by 2020. As for jobs? It should employ around 6,500 people by the end of this decade, but it remains to be seen where exactly the plant will sit.