Tesla Motors Inc announced on Thursday that it had reached an agreement with Panasonic Corp to build a large-scale battery plant in the US.
Hours after the deal, Tesla said its losses grew in the second quarter to nearly US$62 million, or US$0.50 a share, from US$30.5 million in the year-ago quarter. However, adjusted earnings were US$0.11 a share, US$0.07 higher than analysts estimated.
The planned factory is to produce batteries for Tesla’s all-electric vehicles, as well as modules for the stationary storage market, a Tesla news release said.
The company said that it estimated that the plant and its associated supplier complex, which it is calling the Gigafactory, would employ 6,500 people by 2020. The company has not yet said where it is to be located and is reportedly negotiating with several states.
Chief technical officer and cofounder J.B. Straubel said the plant represented “a fundamental change in the way large-scale battery production can be realized.”
“Not only does the Gigafactory enable capacity needed for the Model 3, but it sets the path for a dramatic reduction in the cost of energy storage across a broad range of applications,” Straubel said in a statement.
The joint project calls for Tesla, which is based in Palo Alto, California, to “prepare, provide and manage the land, buildings and utilities,” as well as assemble the battery packs. Panasonic is to manufacture and supply the lithium-ion cells needed for the batteries and invest in machinery and tools.
The goal is to reduce costs required to make battery packs for vehicles, which is expected to enable the company “to meet its goal of advancing mass market electric vehicles,” Tesla said.
Currently, the large batteries required to power electric cars are a major reason such cars are much more expensive than conventional gas-powered vehicles.
Tesla said those cost reductions would be “driven by economies of scale previously unobtainable in battery cell and pack production.”
Panasonic executive vice president Yoshihiko Yamada said in a statement on Thursday that once the factory was up and running, the company believed it would be able to “accelerate the expansion of the electric vehicle market.”
So far, the market for electric vehicles has struggled to break out of niche territory. Tesla itself sold only about 1,500 vehicles in June and 9,100 in the first half, according to Autodata. That was up slightly compared with the previous year.
For the second quarter, Tesla reported US$769.3 million in revenue, below Wall Street’s expectations of US$801.9 million. In the same period in the previous year, Tesla lost US$30.5 million on revenue of US$405.1 million.
Tesla predicted last week that it would sell 9,000 cars in the third quarter and 35,000 for the entire year. The company also told investors that it would spend US$100 million more this year than previously expected.
Tesla’s stock price closed at US$223.30, down 2.46 percent in New York trading.
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