Panasonic Aims to Help Tesla Launch Gigafactory

Japanese tech giant sending “100s” of workers to Nevada.

by on Jun.09, 2015

A rendering of the Tesla Gigafactory.

Tesla Motors will get a big helping hand from its Japanese tech partner Tesla in a push to get the planned Gigafactory battery plant into production next year.

Panasonic plans to send “hundreds” of its own employees to the Reno, Nevada plant site in an effort to help Tesla get it completed. The $5 billion Gigafactory is expected to become the world’s largest producer of lithium-ion batteries once it gets up to full speed, those batteries used not only for Tesla’s electric vehicles but also for backup energy systems and other applications.

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“We’ll need hundreds of people at the start,” Yoshio Ito, Panasonic’s automotive and industrial systems division chief said in Japan. “We should actually see that starting around the autumn.”

Panasonic, which has been supplying batteries for the Tesla Model S, is a major partner in the Gigafactory, with its own investment expected to approach $500 million.

First announced two years ago by Tesla CEO Elon Musk, the Gigafactory touched off a bidding war among states looking to get the 6,500 jobs it promised. Nevada was declared the winner last September – in return for $1.25 billion incentives.

At the time, Gov. Brian Sandoval declared the package approved by Nevada lawmakers, “some of the most important legislation that’s hit this state in perhaps our history.”

(Tesla takes some unexpected lumps from Consumer Reports. Click Here for the story.)

Skeptics have questioned both the ability of Tesla to deliver on its promised production plans and the need for a factory capable of producing 500,000 battery packs a year once up to speed.

A primary outlet for that supply will be the additional products Tesla plans to bring to market in the coming years. It will follow the current Model S sedan with the launch later this year of its Model X sport-utility vehicle. But Tesla expects the real surge in demand to come with the subsequent debut of its planned Model III, a more mainstream battery-car.

(Tesla losing money, but promising to get Model X to market by Q3 2015. Click Here for more.)

Separately, the California maker recently launched a new unit, Tesla Energy, that will produce, among other things, business and residential battery storage systems.

“I can’t understand the fascination with this,” chided former General Motors Vice Chairman Bob Lutz, during an appearance on CNBC this week. He derided as “overvalued” the concept of using lithium-ion batteries for whole house storage systems.

But the launch of Tesla Energy has seemingly kick-started Tesla stock after it began losing momentum in recent months. Since announcing the company’s Powerwall unit, Tesla shares have risen by 25%.

Tesla is beginning to bring in non-construction teams at the Reno site even before work on the Gigafactory is completed. It hired a dozen workers earlier this year and expects to have 300 more by next year. By the third year, it is expected to have 2,000 workers in place, according to its incentive package, with 4,000 on the site by year five. The eventual target is 6,500.

(For more on the record Tesla incentive package, Click Here.)

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4 Responses to “Panasonic Aims to Help Tesla Launch Gigafactory”

  1. Jorge says:

    I can’t understand the need for Panasonic to bring in workers from Japan to construct this factory unless there is some tech issues that workers in the U.S. are untrained for. My guess is these imported laborers will be paid the compensation they typically receive in Japan and not the minimum U.S. wages and benefits.

    That being said Bob Lutz is 110% correct that Musk is selling a fantasy to the media as there is no need for a new factory producing 500,000 Li-ion batteries annually. Musk’s home battery storage idea is technically foolish and illogical so he should be able to dupe the masses into buying these systems – until the media finally reports how impractical they are – just like EVs for 99% of the world.

    This GigaFARCE will be another black hole money pit that closes it’s doors after hydrogen fuel cells become the predominant EV design in a few short years. The every battery powered EV will have a market value of about $5 on a good day. I suspect there are going to be a lot of Tesla stockholders who get fleeced on this deal.

  2. DWH says:

    First I want to say, I really like Bob Lutz a great car guy, and volt advocate! But as I am seeing with my car guy friends and associates a almost blindness to the possibilities of combining ev, solar electric generation,home battery storage on and off grid. Maybe its too incompassing or holistic in the idea of a person being able to create their own energy and use in their house and transportation without any further exchange or investment and litterially any where the sun shines. Its called self reliance. Maybe those that have enough money to afford anything and have revenue streams from corporations. And corporations that have revenue streams from the masses would not understand. After all the herd mentality is to follow the leader. What if the followers are now leaders? Just a thought.

    • Jorge says:

      There are many people in sun belt areas of the U.S./world that use solar with battery packs to power their homes, etc. and even sell the excess to the utility companies. The problem with solar is you need a good quantity of sunlight per day and relatively modest climatic temps to make a system cost effective.

      There are also people who live off-the-grid in remote areas who are perfectly happy but it comes at a price. They typically still depend on some form of propane or Diesel fuel to power essential electrical items.

      The reason most of the world has not jumped on solar or battery storage is because it’s not practical or cost effective. In addition these systems all have maintenance requirements that take time and money. The best lead-acid or Li-ion batteries have a life expectancy of 10-12 years. Some special industrial lead-acid batteries have a life expectancy of up to 25 years but the cost typically negates their use for battery storage systems. Then there is the toxicity issues and disposal of depleted batteries to contend with.

      There is no blindness as far as I can tell, just a lack of practicality and excessive cost that is preventing people from using alternative energy systems. Wind power seems to be the current big trend with wind farms popping up all over the place. These can be an eyesore and noise generator as well as a detriment to birds, but they are rapidly growing in numbers.

  3. DWH says:

    I see that mercedes benz has gone in partnership for building batteries for home anb commercial electric storage. With their announced 10 new models coming out a new synergy with home, solar, ev and storage is likely in germany and europe.
    Individual energy production is already changing how farmers in germany farm. For some it is more profitable to garm the wind and sun then the land.