California-based electric vehicle company Tesla Motors is in talks with Japan’s Panasonic to create a $1 billion automotive battery facility in the United States. The invitation to collaborate has been extended by Tesla to other Japanese materials makers in hopes of decreasing costs in manufacturing lithium-ion batteries, which the company uses for its electric vehicles.
The proposed plant will house all tasks in manufacturing lightweight batteries beginning from the processing of raw materials up until the assembly. The target date to begin operations in the plant is by 2017 and would cater to Tesla and other automakers, including Toyota Motors. As batteries takes a huge chunk out of the costs in manufacturing cars, Tesla hopes that the collaboration will help cut the price of production, which will make the vehicles more affordable to consumers, just like its gasoline-based counterparts. Part of the plan is to also develop “home-use” batteries for grid storage.
Panasonic’s relationship with Tesla began on a project to develop next-generation auto batteries. Last year, the contract was extended to supply up to two billion lithium-ion units to Tesla until 2017. While there is no confirmation from either of the two companies yet, Panasonic said that, “it is studying every possible way to strengthen ties with Tesla.” Advanced Research Japan analyst David Rubenstein stressed that the reports are still in the “talking point.” He added, “Panasonic’s margins on its battery business are razor-thin, so it’s little more than wishful thinking that this kind of project, if true, would actually add meaningfully to its bottom line.”
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