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Tesla and Panasonic earlier had agreed to co-develop a new battery cell technology. Shown is the Model S.

Tesla and Panasonic expand cooperation on battery cells

Panasonic will handle the cell-making activity at Tesla's coming battery manufacturing facility dubbed the Gigafactory, the two companies announced July 31. Panasonic already supplies cylindrical (18650 type) battery cells for the Tesla Model S from its factories in Japan. The automaker is in the process of selecting a site in the southwestern part of the U.S. for a large-scale battery factory to meet demand for future additional Tesla vehicle models and to supply the stationary-energy-storage market. Panasonic's cylindrical cell operation at the Gigafactory will take up half the space in the building, with the remainder to be used by Tesla and suppliers to assemble the newly developed cells into modules and full battery packs. Expected capacity at the Gigafactory is 35 GW·h of cells and 50 GW·h of packs per year by 2020; to meet that pack target, Tesla will import additional Panasonic cells from Japan.

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