Panasonic in Doubt Regarding Investment in Tesla’s Massive Battery Plant in the US image

Panasonic Corp, Tesla’s main supplier of lithium-ion cells for the Model S sedan, hasn’t committed to make investments in Elon Musk’s idea of a massive US battery plant.

Last month, Tesla CEO Elon Musk announced it plans to build a massive battery plant in the US and said the company is already looking for potential sites in the southwestern states. Tesla said that for the completion of this project a $5-billion investment will be required. The Gigafactory battery plant will have around 6,500 workers by 2020.

“Our approach is to make investments step by step,” said Panasonic President Kazuhiro Tsuga. “Elon plans to produce more affordable models besides Model S, and I understand his thinking and would like to cooperate as much as we can. But the investment risk is definitely larger.”

Still, Elon Musk is optimistic that Panasonic might play a role in this project, but the company’s participation is not “100% confirmed.

“Having Panasonic as a joint venture partner would facilitate strategic access to Panasonic’s supply chain and reduce risks,” said Craig Irwin, a New York-based analyst at Wedbush Securities Inc.

Some possible locations for Tesla’s factory would be Nevada, New Mexico,Arizona and Texas. Tesla has already managed to raise almost $2 billion in a convertible bond sale for product development and the construction of the plant. Elon Musk says that this plant will help the company reduce battery costs and therefore increase sales to thousands of affordable electric vehicles annually.