Tesla (TSLA), Panasonic in Talks to Set Up Auto Battery Plant in US: Report

Tesla Motors (TSLA) and Panasonic are in talks to build an automotive battery plant in the U.S., Nikkei reports.

Targeted to go onstream in 2017, the giant battery facility, which Tesla is calling a Gigafactory to supply the $35,000, third-generation car it’s seeking to produce, will handle everything from processing raw materials to assembly, the report said.

The report also said that “Panasonic is inviting a number of Japanese materials makers to sign on, with total investment expected to reach more than 100 billion yen ($965 million).”

Slashing battery prices, which represent a big chunk of a vehicle’s cost, would allow for the creation of more affordable electric cars for consumers. With the new facility, Tesla aims to bring the vehicles down into the same price range as gasoline powered cars.

Tesla’s CEO, Elon Musk, predicted in November that the Gigafactory, which will allow his company to build and secure its own reliable supply of batteries, would have a capacity equal to all factories making lithium ion batteries worldwide. The facility could cost between $2 billion to $5 billion.

The report also noted that plant “will produce small, lightweight batteries for Tesla and may also supply Toyota Motor as well as other automakers. Plans to make home-use storage batteries are also on the table to raise production volume.”

In other Tesla news: the company received another boost to its growing popularity. The Consumer Reports Annual Auto Issue ranked the company’s all-electric Model S the top overall pick. A score of 99 out of 100 on survey results from 1.1 million subscribers, made the Tesla Model S Consumer Reports’ highest-rated model. The results were based on what the magazine called the car’s “exceptional performance” and its many “impressive technological innovations”.

TSLA reached a new 52-week high of $259.20 during Tuesday’s trading session. The shares closed at $217.65 on Monday.

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