Tesla and Panasonic have become increasingly linked together through massive manufacturing projects over the years and it looks like it could happen again as Tesla eyes a factory in China.

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Panasonic has long been supplying the battery cells for all of Tesla’s vehicles and the company partnered up in 2013 to build the Tesla Gigafactory 1 in Nevada, where Panasonic now manufactures the Model 3 battery cells.

Tesla also contracted Panasonic to take over the manufacturing of solar cells and modules at Gigafactory 2 in Buffalo.

Everything points to the Japanese manufacturer getting increasingly involved in Tesla’s manufacturing effort, but the biggest sign would be for them to partner up again on a battery factory.

Panasonic has often shown its willingness to partner with Tesla again on such a project and it’s now more relevant than ever since the Chinese government has now announced that Tesla could own 100% of an electric car factory in the country.

Kazuhiro Tsuga, Panasonic’s CEO, said today during the company’s earnings call that they could produce jointly with Tesla if the company launches production in China (via Reuters):

As already reported, Tesla could in the future launch full-fledged production in China – and we could produce jointly,

The company says that its battery cell sales, which mostly come from Tesla, are expected to drive operating profit up 11.7 percent to 425 billion yen ($3.87 billion) over the next year.

During Tesla’s own earnings call last week, Musk said that the automaker will announce a location for a Gigafactory in China “soon”.

He also reiterated that all future Gigafactories, which are called ‘giga’ because they produce gigawatt-hours worth of battery capacity, will also include full vehicle production:

In the future, all Gigafactories will include vehicle production. So, right, now we’ve got vehicle production and battery production. Like, battery production and motor and power electronics and charger production are at Giga 1 and Fremont car factory. But future Gigafactories will all incorporate vehicle production.

It sounds like a potential ‘Gigafactory 3’ in China could be the first example of such a factory.

Electrek’s Take

Tesla previously said that it would be open to having other partners for its Gigafactory projects, which they would like to have by the dozen at some point. But it looks like they are continuing to grow closer to Panasonic since the partnership on Gigafactory 2.

It’s generally not good to be so dependent on a single supplier, but in this case, the relationship seems to have evolved from a buyer/supplier to a full-fledged partnership over the years.

The relationship has been very beneficial to Panasonic also.

Between all its product lines, Tesla is now the biggest buyer of li-ion batteries in the world and that gives the company some power with battery manufacturers.

Most of that volume is going to Panasonic, but Tesla has been spreading it out a little over the last few years with orders going to LG Chem and Samsung SDI for a few projects.

While I think Panasonic will most likely be Tesla’s partner for the next Gigafactory, I wouldn’t be surprised if Tesla shopped around for a deal.

What do you think? Let us know in the comment section below.

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