Tesla battery partner Panasonic expects cell sales to double in three years


Tesla Model 3 design prototype  -  reveal event  -  March 2016

Tesla Model 3 design prototype - reveal event - March 2016

As the primary battery supplier to Tesla Motors, Panasonic has a secure position as one of the top players in automotive lithium-ion cells.

The Japanese electronics company is closely involved in the construction of Tesla's Nevada battery "gigafactory," which will provide the economy of scale necessary for Tesla to hit its $35,000 price target for the 215-mile Model 3.

At least one Panasonic executive is already making positive predictions about the impact of full-scale Model 3 production on the company's battery-cell sales.

DON'T MISS: Panasonic to build electric-car battery cells at Tesla gigafactory this year: report

Panasonic expects demand from Tesla to help double its sales of electric-car battery cells in three years, according to Reuters.

Kenji Tamura—an executive in charge of Panasonic's automotive and industrial business—told the news agency that he expects annual automotive-battery sales to grow to 400 billion yen ($3.98 billion) in the fiscal year ending in March 2019.

That's compared to 180 billion ($1.70 billion) yen for the fiscal year that ended this past March.

Tesla gigafactory, March 2016, shown in drone footage posted to YouTube by Above Reno

Tesla gigafactory, March 2016, shown in drone footage posted to YouTube by Above Reno

Combined sales from both automotive and energy-storage battery cells should reach 500 billion yen ($4.7 billion) in the same period, or around 2.5 times the total for both products in the last fiscal year.

Tamura also said that Panasonic plans to accelerate a previously-announced $1.6 billion investment in the Nevada gigafactory, at Tesla's request.

ALSO SEE: Panasonic Commits $1.6 Billion For Tesla Battery Gigafactory

Panasonic originally planned to release that sum in a series of eight installments over a longer period of time.

It was also reported recently that Panasonic planned to start production of lithium-ion cells at the gigafactory as early as November.

Tesla gigafactory, March 2016, shown in drone footage posted to YouTube by Above Reno

Tesla gigafactory, March 2016, shown in drone footage posted to YouTube by Above Reno

Supervision of cell production is one of Panasonic's responsibilities as part of its partnership with Tesla.

The electric-car maker already assembles battery packs for stationary energy storage at the gigafactory, and it plans to hold a grand opening at the facility later this month.

MORE: Tesla gigafactory grand opening event to be held July 29

Volume production of actual lithium-ion cells is crucial to meeting Tesla's stated goal of starting Model 3 production during the second half of next year.

That, in turn, is crucial to achieve CEO Elon Musk's target of building 500,000 electric cars per year by 2018.

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