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Tesla's US 'Gigafactory' will be operated by Panasonic's battery masters

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The first step to becoming a large-scale car manufacturer

Electric car manufacturer Tesla has today announced a partnership with Japanese electronics giant Panasonic to build a large battery manufacturing plant on US soil. Dubbed the "Gigafactory," the facility will produce the lithium-ion cells, modules, and packs that power Tesla's all-electric vehicles. While Panasonic will be doing the actual manufacturing, Tesla will manage the site and assemble the cells into packs and modules. The California-based manufacturer already has a deal in place to purchase cells from Panasonic's existing battery factories, and says the new factory will not supplant that arrangement.

Tesla first announced it planned to build a battery factory in the US last November, and reaffirmed its commitment to that plan back in February. The new plant is vital if Tesla is to fulfill its ambition to become a mass-market car manufacturer. Earlier this month it announced the Model 3, a smaller, cheaper vehicle that will be Tesla's first shot at selling a car on a large scale. Discussing today's announcement, CTO and co-founder JB Straubel says the plant enables the "capacity needed for the Model 3" and will put the company on a "path for a dramatic reduction in the cost of energy storage."

The Gigafactory will produce 35GWh of battery cells and 50GWh of packs per year by 2020, when Tesla also says it'll employ around 6,500 people. Previously, the company had announced the factory would be ready by 2017, but today's announcement contains no mention of that date.