Panasonic Corporation has reached a basic agreement with Tesla Motors to participate in the Gigafactory, the huge plant for building batteries for future Tesla electric cars.
According to the Japan’s Nikkei report, Panasonic would invest between $194 million and $291 million in the factory, and an official announcement is expected by the end of the month.
Overall investment in the project could climb to $5 billion with Panasonic’s share climbing to $1 billion, Nikkei says.
Tesla has said it is evaluating sites in Arizona, California, Nevada, New Mexico, and Texas to place its massive battery factory, which could cost as much as $5 billion. The report did not mention, however, where the plant’s site would be.
Tesla Motors would break ground on the Gigafactory later this year, and the factory is expected to reach full capacity by 2020, providing battery packs to about 500,000 cars a year or more lithium-ion batteries in a year than were produced worldwide in 2013.
Panasonic owns a stake in Tesla and makes the batteries used in Tesla’s cars. In a contract reworked in October 2013, the two agreed that Panasonic would supply Tesla with 2 billion battery cells between 2014 and 2017.