Tesla Motors has been reported by Nikkei Asian Review to be getting ready to announce an agreement with Panasonic for its Gigafactory.
The agreement will have the Japanese electronics company participate in Tesla's large-scale battery plant, according to CNET. Panasonic would initially invest between 20 billion yen and 30 billion yen (about $194 million to $291 million) and provide machines to use for producing lithium-ion battery cells for electric cars.
Nikkei added an official announcement about the deal will be made at the end of July, and that Tesla is looking to start the first phase of construction this year.
Panasonic is the main supplier of batteries for Tesla, and the company signed a letter of intent in May to participate in the Gigafactory. However, doubts about Panasonic's participation rose due to the company currently working on restructuring itself, MarketWatch reported.
Tesla said it is looking at different locations to build the plant, which include Texas, New Mexico, Arizona, Nevada, and California. The electric car company added that the factory could cost as much as $5 billion to build.
The report also said production for Tesla's electric car batteries is set to begin in 2017, which is when the company is also slated to start making its $35,000 Model 3 Sedan, CNET reported.
The goal for the Gigafactory is to maximize capacity by 2020 in order to provide battery cells for 500,000 electric cars a year. Tesla is looking to achieve this by adding capacity in phases.
The agreement would help Tesla address different issues with its vehicles, such as constraints on supply, Business Insider reported. Mike Ramsay from the Wall Street Journal said in April that it was a lack of batteries that held back the electric car maker's growth last year.
"Tesla, with sales of just over 22,400 cars last year, is already the largest buyer of lithium-ion battery cells in the world," Ramsay said. "With plans to sell 500,000 vehicles, its own demand would be greater than the demand for every laptop, mobile phone and tablet sold in the world."
