BREAKING: With Gigafactory Announcement Due, Panasonic Reportedly Considers $1 Billion Tesla Investment

Sometime between today and Friday, Tesla Motors [NASDAQ:TSLA] is expected to make an announcement detailing its final plans for what it says will be the world’s largest ever lithium-ion battery production and recycling facility to date.

But while we wait for Tesla’s official announcement, news from Japan suggests that electronics giant Panasonic is readying itself and a consortium of Japanese materials suppliers to invest $1 billion in the monster-sized battery plant in a joint deal with the high-flying car company.

Tesla's Model X will use Panasonic-made cells. But Panasonic wants to help Tesla built its gigafactory

Tesla’s Model X will use Panasonic-made cells. But Panasonic wants to help Tesla built its gigafactory

Earlier this morning, Transport Evolved learned from a Japanese language version of MSN  that Panasonic — which currently provides Tesla with modified 18650 form factor battery cells used to build the battery pack of its highly-acclaimed Model S Sedan — was considering investing substantial sums of money in Tesla’s Gigafactory.  Shortly afterwards, Reuters reported that Panasonic was in the process of building a consortium with various Japanese materials suppliers to stake a ¥100 billion claim in Tesla’s Gigafactory. At today’s exchange rates, that’s equivalent to around $1 billion, or to put it another way, more than twice the amount of money Tesla was awarded and paid back to the U.S. department of energy under the Advanced Vehicle Technology Manufacturing Loan program.

The news comes at the perfect time for Tesla, whose stock rocketed yesterday during trading to $259.20 on the news that Morgan Stanley had raised its target price for Tesla stock to $320 a share from $153.  Despite falling slightly before the close of trading, Tesla shares remained up $30.50, or 14 percent, at the end of the day.

Interestingly though, it’s not Tesla’s recent Q4 2013 earnings report driving the shares, analysts say, but the expected news from Tesla about its Gigafactory. As an automaker, Tesla is continually gaining market share and slowly eroding its net losses, but as a battery manufacturer, Tesla has the potential to revolutionize not only the transportation world, but the energy storage and consumer electronics industry too.

Expected to produce and recycle more lithium-ion battery packs than all of the facilities currently in operation in China, South Korea and Japan combined, any company investing in Tesla or its Gigafactory should benefit from the economies of scale that will inevitably come into play at the Tesla Gigafactory, resulting in a much-reduced purchase price and since Tesla CEO Elon Musk says the factory will develop improved chemistry technology too —  lighter, more durable, and more energy dense batteries too.

In order to increase car production, Tesla needs the gigafactory.

In order to increase car production, Tesla needs the gigafactory.

Even for companies who don’t directly do business with Tesla or invest in its facility, the knock-on effects in the growing lithium-ion industry from transportation and electronics gadgets through to offgrid backup and power distribution, are expected to change the industry forever.

With Tesla consuming an estimated one third of all electric car battery packs produced last year, we’d also expect electric car battery innovation rates to rise, battery pack prices to drop, and electric cars to become far more affordable over the next ten years.

It’s no wonder then that Panasonic’s proposed consortium of companies is looking at a $1 billion investment, somewhere between a fifth and a sixth of the total estimated investment analysts say would be needed to fund a two or three-year gigafactory construction plan. That should be just about long enough for Tesla to work its way through the estimated 2 billion lithium-ion cells outlined in a four-year supply agreement Tesla signed with Panasonic back in October in order to expand Model S production and ready its Model X Crossover SUV for market.

While Tesla nor Panasonic are publicly commenting on the rumors at this time, we’d expect to hear more some time before Friday — possibly even today — on both the investment rumors and Tesla’s chosen Gigafactory construction site.  As always, we’ll bring you the news as soon as we have it.

[Hat-tip: Brian Henderson]


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