Tesla Motors Inc (NASDAQ:TSLA) has entered into an agreement with Panasonic Corp to supply the lithium-ion battery with machinery to make battery cells, according to a report from Nikkei. Panasonic will invest approximately 20 billion yen to 30 billion yen in the starting.tesla

Panasonic very much interested

The report from Nikkei, also, said that an official announcement will be made by the end of July and there was no word from Tesla. The EV manufacturer is considering three sites in the United States to set up its much talked about Gigafactory. The giant factory will make more lithium batteries in a year compared to the worldwide production in 2013.

Panasonic revealed its wish in May that it wanted to be the only battery cell maker at Tesla Motors multibillion dollar battery factory.  The factory requires an investment of $5 billion and Panasonic has contributed little under $1 billion and still counting, says Reuters.

Recently, string of reports claimed that Tesla might be closing in on San Joaquin County for Gigafactory, leaving behind other sites such as Nevada, Texas, and New Mexico, who are also in the run. Allegedly, the company has already started to construct the plant in the San Joaquin County city of Lathrop, which will have 100 employees.

Is Tesla gigafactory in San Joaquin?

San Joaquin County can be seen as a viable option for Gigafactory, proposed to employ 6,500 people and experts.

“There is no better distribution center in Northern California than San Joaquin USA and we can move things internationally, there’s company after company that locates here simply because of the logistics,” San Joaquin Partnership President Mike Ammann.

According to Ammann, over 60,000 people from San Joaquin County travel to Bay Area and the Silicon Valley, so the labor force is in abundance. Ammann stated that the EV manufacturer needs 500 acres for its plant.

An advantage that Stockton has over other sites is that it is just an hour away from Tesla Motors car assembly line in the San Francisco Bay Area city of Fremont, and just a drive of 14 minutes by car from the company’s new parts facility in Lathrop. Shelley Burcham, vice president of the San Joaquin Partnership, an economic development agency that includes Greater Stockton said that there are a lot of opportunities and that the county is keeping its best foot forward.