Panasonic confirms will invest in $5 billion Tesla battery plant

Reuters

Published Jul 31, 2014 04:42PM ET

Panasonic confirms will invest in $5 billion Tesla battery plant

By Sophie Knight

TOKYO (Reuters) - Panasonic Corp confirmed on Thursday it would invest in U.S. electric carmaker Tesla Motors Inc's planned $5 billion lithium-ion battery plant in the United States, but said it had yet to decide on the size of its investment.

The Japanese company, which already supplies batteries for Tesla, said it was gauging the demand for batteries before deciding on an amount. It had earlier said it would invest in stages and that any expenditure this year would be small.

"We have not yet decided exactly how much we will invest and when," said Chief Financial Officer Hideaki Kawai.

"However, Tesla is a very important partner to us and discussions are continuing. We need to look very carefully at auto demand and respond appropriately so of course that means taking a step-by-step approach to investment," he added.

A person familiar with the matter told Reuters on Tuesday that Panasonic would initially invest around 20 to 30 billion yen ($200-300 million) into the factory and would ultimately invest about $1 billion.

Demand for batteries from the U.S. premium eco-car maker has been a boon for Panasonic as it tries to expand its business as an industrial supplier, especially to the auto sector, and reduce its reliance on volatile consumer markets.

Under the agreement, Tesla will prepare, provide and manage the land while Panasonic will manufacture and supply cylindrical lithium-ion cells and invest in the equipment, machinery and other manufacturing tools, they said in a joint statement.