Panasonic aims to be sole producer in Tesla's U.S. mega-factory

Fri May 23, 2014 9:23am EDT
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By Reiji Murai

OSAKA (Reuters) - Panasonic Corp said it expected to become the sole manufacturer in Tesla Motors Inc's planned multibillion-dollar U.S. battery factory, firming up its commitment to the electric car maker's project.

The Japanese electronics conglomerate had until this week made only cautious comments about Tesla's plans, for which the carmaker is seeking total investment of around $3 billion in addition to the $2 billion it has pledged to contribute directly.

Panasonic does not have a timeframe for a decision on its investment but any expenditure this year would be small, Yoshio Ito, senior managing executive officer and president of the Japanese firm's automotive and industrial division said on Friday.

"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," Ito told reporters at a briefing in Osaka.

Demand from the U.S. premium eco-car maker for lithium-ion batteries has been a boon for Panasonic as the Japanese firm seeks to expand its sales of industrial goods to other businesses and reduce its reliance on volatile consumer markets.

Ito said the two companies were discussing details of their investment in the new factory and would talk about construction plans.

He said Panasonic, which is already Tesla's prime supplier for lithium-ion cells but competes with Samsung SDI Co Ltd for auto batteries, did not expect any rival battery makers to put in a competing bid.

However, he said there was a possibility Panasonic would not contribute the majority of the remaining investment even if it became the sole manufacturer at the factory.   Continued...

Panasonic Corp's Logo is pictured at an electronics store in Tokyo March 28, 2013. REUTERS/Yuya Shino