Tesla/panasonic Deal Boosts Ever-growing Lithium-ion Battery

The news of Panasonic’s decision to partner with Tesla to enable the automobile manufacturer’s dream of opening a gigafactory to build lithium-ion batteries for the automobile manufacturer’s electric cars is seen as a positive development. This will boost both the energy storage and electric vehicle industries.

Tesla plans to build this factory with a $5 billion investment. Tesla has already raised over $2 billion to fund this project and it is to be seen what contribution Panasonic will bring to the table. It had been a wait and watch period for Panasonic who was undecided of joining Tesla for this project. It is interesting to note that Panasonic does already supply lithium-ion battery cells to Tesla for its electric vehicles, but was not committed to partner with Tesla on this project. Now the next announcement eagerly awaited by all is for Tesla to finalize the city in which they will open this gigafactory.

The lithium-ion battery market for electric vehicles was estimated at $3.2 billion in 2013 growing at a compound annual growth rate of over 32 percent. Several new vehicles are expected to be launched across the North American, European, and APAC markets. Demand within the hybrid electric vehicle sub-segment is expected to remain strong over the forecast period. Additionally, greater adoption of electric vehicles that typically have larger battery packs of 24 kWh or higher, compared to 1.3 kWh, will likely lead to higher revenue growth for battery vendors. Growth in deployment of support infrastructure – namely the placement of charging stations – is expected to continue throughout the forecast period and will likely help encourage electric vehicle adoption.