US car marker Tesla’s plans to build a $5bn battery ‘Gigafactory’ have advanced with Panasonic signing a letter of intent to join the project.
Elon Musk, Tesla’s chief executive officer and main shareholder, disclosed Panasonic’s growing interest the plant in a conference call to discuss first-quarter earnings.
“We’re heading toward a final agreement sometime later this year,” said JB Straubel, Tesla’s chief technology officer. While Panasonic will be the only cell supplier at the factory, Tesla may buy cells from other suppliers, Musk said.
Chieko Gyobu, a spokeswoman at Panasonic, confirmed the letter of intent by e-mail, reported Bloomberg. “We are talking to Tesla about joining the gigafactory,” Gyobu said. “We’ll discuss details going forward.”
Groundbreaking on one of at least two possible factory sites may happen as early as next month, Musk said. Tesla has said Arizona, Nevada, New Mexico and Texas are possible factory sites and that it will break ground in at least two states.
Tesla reported first-quarter Model S sales growth that was below top-of-the-range analyst estimates; tight battery supply continues to restrain growth. The Californian company reported first quarter costs of $2m to retrofit Model S battery packs with titanium shields for extra safety in the event of a crash.