The Japanese company has long been viewed as the likely strategic partner for the project. A fresh report from Nikkei suggests the companies have finally established a basic agreement, if not a finalized contract.
Panasonic is expected to invest up to 30 billion yen (~$294 million USD) up front, installing the necessary machinery to begin manufacturing battery cells. Another $700 million in later investment is also expected, representing 20 percent of the estimated $5 billion in overall costs.
Tesla has established a lofty goal of revolutionizing the battery industry. Bringing in one of the top players in the segment has been viewed as a necessary strategy to keep the project on track for production in 2017.
Panasonic reportedly aims to dominate the automotive battery business by 2019, around the time EVs and plug-in hybrids are expected to be met with a surge in demand. Sales numbers will be contingent upon the value proposition, requiring a substantial decline in per-kWh prices.
Tesla is hoping to reduce battery costs by as much as 40 percent within three years, enabling the company to make a profit from a mass-market vehicle with at least 200 miles of range.
The California-based startup is expected to formally announce the Panasonic partnership in the near future.
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