Panasonic considers coming onboard with a Tesla Gigafactory in China

Panasonic is currently an important part of Tesla’s first two Gigafactories; Gigafactory 1 in Nevada does battery production and Gigafactory 2 in New York handles solar panel and tile production.

Tesla says that it has several other Gigafactories planned and Panasonic says that it is now considering partnering up again with Tesla for a new Gigafactory in China.

Last year, Tesla finally confirmed working with the Shanghai government to establish a manufacturing facility in the region and promised an announcement by the end of the year, which never happened.

At CES this week, Kazuhiro Tsuga, Panasonic’s president, said that the Japanese company is considering producing battery cells for Tesla at the planned factory in a similar deal that they have in Nevada.

Nikkei reported:

“Panasonic will probably follow Tesla’s lead and make any necessary investments, but a detailed schedule has not been determined yet, Tsuga said.”

Tsuga also acknowledged slower than anticipated production ramp of the Model 3 affecting operations at the Gigafactory, which he will be visiting this week since he is in Nevada for CES.

Electrek’s Take

So far, it would seem that the Tesla-Panasonic partnership has been mutually beneficial and contributed significantly to the recent success of both companies.

It would make sense for them to replicate the partnership for other factories and it looks like China is at the top of the list.

China is already the biggest market for electric vehicles, or any vehicles for that matter, and Tesla profited from the demand by tripling its sales to over $1 billion in the country in 2016. While we don’t have the final numbers for 2017 yet, it looks like they have delivered even more vehicles in the country last year.

We reported that Tesla continued to have strong sales in the country in 2017, where it leads foreign electric car sales with no close second.

That’s despite the 25% import duty that Tesla is facing in China until it can manufacture its vehicles locally.

In November, Tesla CEO Elon Musk elaborated on the automaker’s plans to establish manufacturing capacity in China with a new factory in the country within the next 3 years. He previously talked about producing both the batteries and full vehicles at the same facility, which could explain Panasonic’s possible involvement.