Tesla Motors, Inc.
) Gigafactory might have
) as a partner and sole manufacturer of lithium-ion battery cells,
according to the latter. However, other partners might supply raw
materials to the factory.
Tesla will invest $2 billion in the factory, while the construction
will require $4-$5 billion. The rest of the fund will be provided
by Tesla's partners. Tesla is considering other potential
investors, such as suppliers of raw materials for the investment.
Panasonic does not have a time constraint to decide the amount and
timing of the investment. However, it said that it will make
investments gradually and that those till March will be small.
Panasonic and Tesla signed a deal in Oct 2013, under which
Panasonic will increase the supply of battery cells to 2 billion in
the 4-year timeframe till 2017. Panasonic has supplied 200 million
cells to Tesla in the last 2 years.
In addition, Panasonic doubled its investment for auto batteries to
28 billion yen ($275 million) this year. Panasonic will utilize
this additional investment to boost the domestic production of the
small lithium-ion batteries for Tesla.
In February, Tesla announced the plans to construct the Gigafactory
to produce lithium-ion batteries for its cars in collaboration with
various partners. The automaker expects the factory to provide
economies of scale and reduce production costs based on innovative
manufacturing techniques, reduced logistic wastes, optimization of
co-located processes and lower overhead costs.
Tesla will be initiating the construction work this year and
expects to finish the factory by 2017. The factory will supply
lithium-ion batteries to Tesla's assembly plant in Fremont, CA.
By 2020, Tesla expects the annual lithium-ion battery production of
the Gigafactory to exceed the global production in 2013. The
factory will produce enough battery packs to allow Tesla to build
around 500,000 electric cars by 2020. Also, by the end of the first
year of manufacture of the planned mass market vehicle, the per kWh
cost of production of battery packs is expected to be reduced by
Tesla currently carries a Zacks Rank #5 (Strong Sell). Some
better-ranked automobile stocks worth considering are
Tata Motors Ltd.
Fuji Heavy Industries Ltd.
). Tata Motors carries a Zacks Rank #1 (Strong Buy), while Fuji is
a Zacks Rank #2 (Buy) stock.
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