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Tesla and Panasonic sign agreement on battery-making Gigafactory

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August 1, 2014

Batteries for EVs like this Tesla Model S could be getting cheaper and more plentiful, onc...

Batteries for EVs like this Tesla Model S could be getting cheaper and more plentiful, once the Gigafactory is in full swing

If electric vehicles are to ultimately become as popular as Tesla hopes they will, then a whole lot of cost-effective batteries are going to be needed. That's why earlier this year, the automaker proposed a "Gigafactory" where it could crank out huge quantities of batteries. By making so many, it could drive down the price per battery via economy of scale. Yesterday, the company announced that it and Panasonic had signed an agreement to build that factory.

As mentioned in our previous article, Tesla plans for the Gigafactory to produce 500,000 batteries per year by 2020, with expected battery cell output of 35 GWh/yr and battery pack output of 50 GWh/yr. Current global battery output, from a variety of manufacturers, sits at just under 35 GWh/yr.

According to yesterday's announcement, "Tesla will prepare, provide and manage 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."

The factory will be be located somewhere in the US and managed by Tesla, with Panasonic occupying about half of the manufacturing space and taking the role of principal partner. Although the cells will be made by Panasonic, Tesla will be incorporating them into battery modules and packs that it will be assembling.

Along with lowering the price of batteries by making them in large numbers, Tesla and Panasonic also plan on reducing costs by manufacturing cells tailored specifically to EVs, locating materials suppliers on-site, and implementing measures to lower the utility and operating expenses of the factory.

There's currently no word on when the Gigafactory is expected to open, although it is hoped to be employing approximately 6,500 people by 2020.

Source: Tesla

About the Author
Ben Coxworth An experienced freelance writer, videographer and television producer, Ben's interest in all forms of innovation is particularly fanatical when it comes to human-powered transportation, film-making gear, environmentally-friendly technologies and anything that's designed to go underwater. He lives in Edmonton, Alberta, where he spends a lot of time going over the handlebars of his mountain bike, hanging out in off-leash parks, and wishing the Pacific Ocean wasn't so far away.   All articles by Ben Coxworth
9 Comments

Considering Tesla's openness regarding its patents, perhaps it can be persuaded to lead a movement to standardise on the size and shape of the cylindrical cells at the heart of the batteries so that the battery packs for all electric cars can take advantage of the economies of scale this battery plant will deliver.

Mel Tisdale
4th August, 2014 @ 03:54 am PDT

Well I think Tesla has done its bit… unfortunately as it has no competition outside of the major automakers who (with one or 2 notable almost-exceptions) really aren't interested in EVs… FCVs maybe but not EVs. The ones that are pursuing EVs (Renault and Nissan) use a completely different format anyway, so it doesn't really matter.

Both types have their pros and cons - I think it's quite healthy to have the 2 basic systems vying for supremacy. A bit wasteful in terms of money and effort but probably worth it in the end. Tesla has by far the better system in terms of energy density/specific energy - and arguably, safety too - so the others have a fare amount of catching up to do. MW

Martin Winlow
4th August, 2014 @ 08:17 am PDT

Now this is great for tesla. Great for the future of electric vehicles and solid progress for US economy and actual industrial manufacturing like a hundred years ago. Investment in green technology. Self sufficiency. Jobs. Good for the planet. The US could easily lead the way in civilian technology and bring back hope and jobs to a larger population.

Dawar Saify
4th August, 2014 @ 08:25 am PDT

I agree with Mel. My only concern regarding my purchase of a Tesla model S was the cost of replacing the battery pack after the warranty period. Hopefully this will drastically lower the cost which, to say the least, is breathtaking.

Not only that, as new technology is developed, the new batteries will offer greatly extended range and decrease charging time.

pickypilot
4th August, 2014 @ 08:29 am PDT

Mel: The most common lithium size is already standardized as 18650, approximately 18mm in diameter and 65mm approx., in length. Many larger power packs are assembled from this size cell. I do not know if the car battery designers have settled on a single EV battery size but I would think Musk's intent will be to arrive at such a standard by sheer force of size. See Wikipedia, lithium batteries.

StWils
4th August, 2014 @ 10:16 am PDT

Supplies of lithium might be a bottleneck for manufacturers wanting to produce more batteries.I wonder if there could be a recycling program set up to accept old lithium cells. Pickypilot: You might be able to sell your old car battery to someone for off grid energy storage.I've read that used batteries are still useful for stationary energy storage.

michael_dowling
4th August, 2014 @ 10:55 am PDT

@Mel they are planning to offer batteries to anyone who wants them (including other companies etc.). I think they are standard size Panasonic cells.

@pickypilot battery costs are falling at about 10%/year and I think Tesla offers a $10k or so prepaid replacement after the 8 year warranty. Some of the math I saw essentially puts the cost of the replacement at about that. They are hoping to get batteries down to $300/kWh w/ gigafactory but Musk said he hopes they will be cheaper than $100/kWh before the next 10 years.

@Martin I would like to see more companies take the EV plunge too because after you calculate the fuel savings they will become cheaper than gasoline vehicles. Plug in hybrid in practice also almost doubles MPG over regular hybrid and there are a lot of hybrid patents that expire over the next 5 years as they have been on the road since the mid 90's. 5 years from now there will be PHEV and EVs all over the place.

Daishi
4th August, 2014 @ 12:28 pm PDT

Wonderful idea !

Marlene Stead Eckard
4th August, 2014 @ 12:40 pm PDT

The short and simple answer is that Elon Musk is aiming to flatten And accelerate the "normal" long curve of product & technology evolution. Usually after some considerable gestation a given kind of technology finally becomes both good and affordable. Think of how long it took for VCRs or Camcorders to drop from pricey to a price most anyone could manage. The implications for society are tremendous and far mor important than just a vcr or camcorder, etc. And, yes the batteries are completely recycleable.

StWils
6th August, 2014 @ 08:54 am PDT
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