Panasonic Corporation (ADR) (OTCMKTS:PCRFY) (TYO:6752) has already made clear its intentions to invest in the planned gigafactory of Tesla Motors Inc (NASDAQ:TSLA). The Japanese electronics conglomerate also aims to become the automaker’s sole manufacturer of batteries for the project.
The proposed budget of Tesla Motors Inc (NASDAQ:TSLA) for its gigafactory is $5 billion. The electric car manufacturer already allocated $2 billion direct investment for the project and it is seeking around a $3 billion investment from potential partners.
Gradual investment in the tesla gigafactory
The comments of Panasonic Corporation (ADR) (OTCMKTS:PCRFY) (TYO:6752) regarding its proposed investment in the gigafactory of the electric car manufacturer are cautious. The Japanese electronics conglomerate’s senior managing executive officer and president, Yoshio Ito, said Panasonic has no timeframe for a decision on the investment for the gigafactory, but indicated a small expenditure this year.
“As we’re not anticipating any sudden tenfold increases in demand or anything like that, we think it is right to break it up step-by-step and invest gradually,” according to Ito during a briefing with reporters in Osaka on Friday.
We will make sure to carry out investments one step at a time in line with demand. Even if we do invest [in the Tesla plant], one factor would be how we’re going to divide up our roles and investments,” added Ito.
Panasonic does not expect competing bids
According to him, Panasonic Corporation (ADR) (OTCMKTS:PCRFY) (TYO:6752) does not expect any competing bids from other battery manufacturers. He emphasized that the company is currently the major supplier of lithium-ion cells for Tesla Motors Inc (NASDAQ:TSLA). The company competes with Samsung SDI Co. Ltd for auto batteries.
Ito also commented that Panasonic Corporation (ADR) (OTCMKTS:PCRFY) (TYO:6752) and Tesla Motors Inc (NASDAQ:TSLA) are discussing the details of the investment and will soon talk about construction plans for the gigafactory.
Furthermore, Ito indicated the possibility that the Japanese electronics conglomerate may not contribute the majority of the remaining investment, although it would become the sole manufacturer in Tesla’s gigafactory.
Elon Musk, chief executive officer of Tesla Motors Inc (NASDAQ:TSLA), previously stated that he expected Panasonic to become its major partner in the project, and he hoped to reach an agreement by the end of this year.
Last year, Panasonic Corporation (ADR) (OTCMKTS:PCRFY) (TYO:6752) signed an agreement with Tesla Motors Inc (NASDAQ:TSLA) to increase its battery cell supply to almost 2 billion units through 2017. The Japanese electronics conglomerate also aims to become the leading manufacturer of auto batteries by March 2019.