Panasonic Outlines Tesla Investment (TSLA)

Advertisement

Tesla Motors Inc (TSLA) has no plans of going at it alone when it comes to the development of its “gigafactory” in Nevada, which is expected to reach 10 million square feet in size.

tesla motors tsla stockIt has long been known that Panasonic (PCRFY) will be a major player in the development of TSLA’s factory, but until recently we were in the dark as to just how much money the tech giant would contribute.

According to a report in The Wall Street Journal, Panasonic CEO Kazuhiro Tsuga said the company would be making an initial investment of “tens of billions of yen.” Moreover, Panasonic will “expand the size as we go by pouring in further installments of similar amounts.”

For context, 10 billion yen on the nose would be worth some $92 million in U.S. dollars, meaning “tens of billions of yen” could reach upward of $900 million.

Why Panasonic?

It’s simple: The Japanese electronics company already produces batteries for the company’s vehicles, and will expand its role via the “gigafactory.” That will help TSLA fight any shortages as production of its EVs ramps up. Tsuga added:

“Our policy is to avoid a situation where Tesla wants to make more cars but doesn’t have enough batteries.”

Granted, having so much demand that you’re having trouble filling it sounds good, but considering the small nominal number of cars Tesla already produces, any hindrance to ramping up production could stunt this red-hot momentum stock.

Once Tesla’s gigafactory is up and running, that’s when things get interesting. Tesla will be in a better position than ever to expand, and could keep TSLA’s hot publicly traded run going.

As of this writing, Chris Bibey did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2014/10/tesla-tsla-panasonic-gigafactory/.

©2024 InvestorPlace Media, LLC