Panasonic, Tesla to build massive electric vehicle battery plant in U.S.

TOKYO—Electric car maker Tesla Motors Inc. is teaming up with Japanese electronics company Panasonic Corp. to build a battery manufacturing plant in the United States.

The companies did not say where in the U.S. the so-called “gigafactory” that is expected to create around 6,500 jobs will be built.

The large-scale plant will produce cells, modules and packs for Tesla’s electric vehicles and for the stationary energy storage market, hitting its peak employment mark by 2020.

Under the agreement, Tesla, based in Palo Alto, Calif., will prepare, provide and manage the land and buildings, while Osaka, Japan-based Panasonic will manufacture and supply the lithium-ion (Li-ion) battery cells and invest in equipment.

The companies said the project will cut costs to better meet mass production needs for electric vehicle batteries.

Sales of electric vehicles around the world are small but growing.

Worries about global warming and more stringent emissions regulations in many countries are expected to boost sales of electric and other green vehicles.

“The gigafactory represents a fundamental change in the way large-scale battery production can be realized,” said Tesla chief technical officer and co-founder JB Straubel, referring to the cost reductions.

Tesla is among the most successful EV makers in the world along with Nissan Motor Co., Ltd. of Japan, which makes the Leaf electric car.

Yoshihiko Yamada, executive vice-president of Panasonic, said the planned factory will help the electric vehicle market grow.

Sales of such cars account for less than one per cent of the global auto market at present.

Panasonic, which has ceded much of its strength in consumer electronics to competitors, is putting more focus on businesses that serve other industries, including batteries.

It remains powerful in Japan and some overseas markets in consumer products such as refrigerators, washing machines and batteries for gadgets.