* Wants to invest in stages, has not decided final amount
* Will spend more than double budget on auto batteries this
(Adds quotes from executive, background of companies'
relationship, details on Panasonic strategy)
By Reiji Murai
OSAKA, May 23 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
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
"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
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.
Tesla Chief Executive Elon Musk told analysts early this
month he had expected Panasonic to become the main partner in
the project from the outset and expected the two companies to
reach an agreement late this year.
He said Tesla was talking to other potential investors and
that other companies such as suppliers of raw materials would be
involved in the project, which is planned to start production in
2017. Musk said Tesla would break ground on one of two planned
locations in June.
Panasonic signed a contract last October with Tesla to
increase its supply to nearly 2 billion battery cells in the
four years to 2017, a leap from the roughly 200 million cells it
was estimated to have supplied to the U.S. company in the
previous two years.
Ito also said that Panasonic would spend more than 28
billion yen ($275 million) on auto batteries this year, twice
its current budget, with the bulk going towards bumping up
domestic production of the small lithium-ion batteries Panasonic
supplies to Tesla.
Some of the extra spending would be directed to supplying
large batteries used by other electric vehicle makers, Ito said.
A source with knowledge of the matter said the remainder would
be used towards a new zinc battery production facility in India.
Panasonic is aiming to be the No. 1 producer of auto
batteries by the year ending March 2019, by when it hopes to be
making annual revenue of 450 billion yen ($4.43 billion), up
from the 130 billion yen it made in the last business year.
($1 = 101.6650 Japanese Yen)
(Writing by Sophie Knight; Editing by Erica Billingham)