Panasonic Corp to invest in Tesla's Gigafactory

Panasonic Corp has signed an agreement to invest in equipment and machinery for a battery joint venture with electric car maker Tesla Motors Inc.

The Japanese battery maker however, did not disclose the amount it would invest in the project, Market Watch reported. The talks between the two companies came to light over five months back.

Nikkei had reported in February, Panasonic Corp was 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).

The agreement announced today would see Tesla provide and manage land, buildings and utilities, as Panasonic made and supplied the lithium-ion battery cells for the US plant, expected to cost as much as $5 billion.

Over the past two years, the Japanese batteries and housing appliances maker had drastically restructured its television, mobile phone and semiconductor divisions to stem losses totaling $15 billion.

In February Tesla Motors Inc said that it plans to raise $1.6 billion from investors to finance a new Gigafactory for making lithium-ion batteries for its mass-market electric car (Electric car maker Tesla to raise $1.6 bn to fund battery plant).

It will be built on an area of at least 1,000 acres and would be powered largely by wind and solar energy, Tesla had then said.

The Gigafactory will manufacture smaller battery packs for its "Gen 3" model, which would be a lot cheaper than its current Model S.

Meanwhile, USA Today reported that Tesla motors shares were on the rise in anticipation that quarterly earnings report today would test whether the electric car maker could continue with its hot run.

Tesla shares closed yesterday at $228.92 a share, up $3.91 or 1.74 per cent.

CEO Elon Musk has reported that Tesla would roll out 35,000 of its Model S luxury sedan this year, about 15,000 more than last year. The Fremont, California factory is set to retool for higher production levels.

Meanwhile there is expectation of a progress report on the factory as also of the progress of Tesla's crossover, the Model X, which is supposed to go on sale next year among investors and electric car aficionados.

The company had still not decided on a site for the plant, where the battery for its Model 3 sedan, due in about three years would be built. The company had said earlier that the choice was still weeks or months away.