Panasonic lone partner in Tesla's battery facility, so far

Panasonic Corp said it expected to become the lone manufacturer in Tesla Motors' planned multibillion-dollar US battery facilty, Reuters reported.

The Japanese company had only made guarded comments about Tesla's plans earlier.

Earlier in February, Nikkei had reported, Panasonic Corp is planning to invest in Tesla Motors' planned car battery plant in the US, estimated to cost around $980 million (See: Panasonic plans to invest in Tesla Motors' new battery plant).

Tesla already buys lithium-ion batteries from Panasonic for its Model S electric sedan as well as for its Model X, a performance utility vehicle that is scheduled to go into production by the end of 2014. Under an agreement signed late last year, Panasonic is to supply nearly 2 billion cells to Tesla over the course of four years

Tesla had been seeking a total investment of approximately $3 billion in addition to the $2 billion it had pledged itself for the factory in direct contribution.

Though a timetable for a decision on the Japanese company's investment had not been finalised, any expenditure this year would be "small" according to Yoshio Ito, senior managing executive officer and president of the company's automotive and industrial division.

Reuters quoted Ito as telling reporters that as the company was not anticipating any sudden increase in demand, Panasonic thought it was right to invest gradually.

He added that the two companies were in discussion over details of their investment in the new factory and would continue to talk about construction plans.

Meanwhile, The Wall Street Journal reported that Panasonic Corp was grappling to find a solution with Tesla on how to achieve an ambitious target of reducing battery-manufacturing costs.

Though the electronics maker had committed to investing in the US plant possibly to the tune of $5 billion, however the amount it would  contribute was still a subject of debate in the company. Several Panasonic executives are wary  of failed capital investments in plasma televisions and batteries.

In a round-table discussion with reporters Friday, Ito asked whether a 30 per cent savings in cost was in sight and went on to say that it was not that easy yet.

Tesla would need to cut the cost of the existing Model S battery pack by at least 30 per cent to make a proposed new car capable of attaining 200 miles of all-electric range and start at $35,000.

According to Ito, Panasonic had proposed to Tesla to work together on electronic controls in addition to battery-cell cost reductions as a means to lower the overall cost of the battery pack, which was a significant portion of the expense of Tesla's current Model S electric car.