Boston, MA 02/26/2014 (wallstreetpr) – Tesla Motors Inc (NASDAQ:TSLA) and Panasonic Corp are planning to build a U.S. car battery plant together, for which Panasonic is seeking investments from Japanese materials suppliers. As Nekkei reported, the investment may total as much as 100 billion yen. Tesla’s shares were on an all time high yesterday after a brokerage firm gave a target price which advised suggested shares would increase by almost 50% after closing on Monday.
Low Cost Electric Cars
The plant aims at boosting the supply of lithium ion batteries which the U.S. electric car maker avails from Panasonic. It is estimated that the plant will start from 2017. Last week, Tesla Motors Inc (NASDAQ:TSLA) had disclosed its plans for setting up of a plant to manufacture lithium ion batteries and had called it “giga factory”. The plant would mean lower battery expenses to the company and would eventually allow it to manufacture lesser priced electric cars in three years’ time. The company had promised releasing more details on its project in this week.
Analysts Consent With Tesla
The proposed plant would be engaged in a lot of activities, from raw materials processing to assembly, yielding small, light weighted batteries. Some other auto manufacturers including Toyota Motor Corp (ADR) (NYSE:TM) might also be supplied batteries produced at the plant, as reported by Nekkei. Analysts also believe the setting up of the plant as a promising step towards contributing in lowering costs of electric cars in the U.S. The giga factory would help collect all necessary materials, module, cell as well as ultimately output a pack production at one point.
In Tesla Motors Inc (NASDAQ:TSLA)’s earnings conference call which took place last week, Chief Executive Officer Elon Musk had informed that they were expecting to partner with one more company in building the plant, apart from Panasonic, which being Tesla’s battery supplier, was a default assumption. Tesla reported better than estimated fourth quarter results.