Panasonic agrees to partner with Tesla on the new Gigafactory. Tesla Motors has a bold vision of mass-producing electric vehicles. According to this week's press release, the Gigafactory is being created to enable a continuous reduction in the cost of long range battery packs in parallel with manufacturing at the volumes required to enable Tesla to meet its goal of advancing mass market electric vehicles. Even though customers are still lining up to get a Model S (which costs between $70,000 - $100,000), the company is now focusing on reducing costs in order to make the SUV Model X and the company's third production vehicle, which is being aimed at a wider audience. At around $35,000, the Model III can compete with the BMW 3-Series and Mercedes-Benz C-Class sedans. With both companies looking for innovative ways to mass-produce Lithium-Ion batteries, this joint venture combines complementary expertise and resources. Tesla will provide the location and facilities and Panasonic will install the manufacturing equipment, machinery, and tools in the new U.S.-based factory. Though Panasonic's exact financial contribution has yet to be determined, Tesla has estimated the factory will cost up to $5 billion by 2020.

“We will reach a plan that is profitable,” Panasonic Chief Financial Officer Hideaki Kawai said at a news conference in Tokyo. “We will do step-by-step investment to meet the gradually growing needs.”

The Economist writes that the Model III is expected to almost match the nearly 300-mile range of the bigger Model S, without taking as long to charge up. To do that and hold the selling price down won’t be easy. Industry analysts believe that the 85 kilowatt-hour lithium-ion battery now used in the Model S costs Tesla almost as much as the $35,000 at which it plans to sell its smaller sedan.

JB Straubel, Chief Technical Officer and Co-founder of Tesla Motors says, "the Gigafactory represents a fundamental change in the way large scale battery production can be realized. Not only does the Gigafactory enable capacity needed for the Model 3 but it sets the path for a dramatic reduction in the cost of energy storage across a broad range of applications."

Bloomberg reports Panasonic shares rose 0.6 percent to 1,257.50 yen in Tokyo. Tesla slid 0.8 percent to $227.13 at 10:37 a.m. in New York, and had surged 52 percent this year through yesterday.

Read the Full Press Release Here: http://www.teslamotors.com/about/press/releases/panasonic-and-tesla-sign-agreement-gigafactory

Storage is important for energy systems. One of the reasons we rely so heavily on fossil fuels is that they are incredibly easy to store. Coal sits in a yard, oil fills up drums, and natural gas is contained in tanks. In contrast, solar panels produce energy only while the sun is shining, and wind works only when it's blowing. These limits are a remaining barrier to widespread adoption of renewable energy. Solar technology is closing in on price levels that are competitive with traditional energy sources. Germany's Deutsche Bank recently released a report that shows solar has achieved grid-parity in India and Italy and that more countries will follow in the next year. However, it almost doesn't matter how cheap solar gets unless we develop storage on an unprecedented scale. Lithium ion batteries are inadequate both in storage capacity and in the price of raw materials. In the optimistic book Abundance, Dr. Peter Diamandis discussed this issue with energy experts and was encouraged to find that progress is being made.

One such subject matter expert is Bill Joy, partner emeritus of Kleiner Perkins Caufield & Byers - the venture capital firm that invests in high impact startups such as Amazon and Google. He saw an opportunity in low-cost electrical energy storage and led investment in a company called Primus Power, which builds rechargeable "flow" batteries. The company stores and time-shifts energy through an electrochemical process. Another of KPCB's portfolio companies, Aquion Energy Technologies, builds batteries with sodium and water. They work similarly to lithium ion batteries, except they use widely available materials for a more economically sound solution. With KPCB's track-record and highly talented connections, these companies represent exciting progress.

MIT professor Donald Sadoway is also optimistic. With support from ARPA-E and Bill Gates, he has developed a Liquid Metal Battery (LMB). The concept uses two molten metals of differing densities with a layer of a salt electrolyte in between them. The result is a simple, cheap design that is also scalable. "Within the next decade, we plan to deploy the shipping container-sized LMB, soon followed by the family-sized unit. There's a clear line of sight to get there, and no miraculous breakthroughs needed," says Sadoway.

Some renewable energy advocates say electric vehicles could act as batteries for the grid while connected. Tesla Motors, maker of high end all-electric automobiles, has posted a profit for the 1st quater of 2013. While this is great news, the car company isn't selling enough currently to impact the grid in this manner. Better battery technology would improve this situation. Tesla is leading the industry with its own proprietary lithium ion battery stack. This helped them to beat out competitor Fisker Automotive with their reliance on the now bankrupt A123 Systems. Further battery improvements could help make electric vehicles become affordable enough for widespread consumer adoption, as Tesla founder Elon Musk envisions. One possibility was recently discovered at the University of Arizona. The research team, lead by Jeffrey Pyun, has developed a way to make a lightweight plastic out of a common industrial waste - sulfur. They have successfully used the plastic to make lithium-sulfur batteries and believe next-generation versions will provide electric cars a cheaper and more efficient energy storage alternative.

Only time will tell exactly when and how the future of batteries will arrive. Already, though, we can see that renewable energy utilization will expand with better battery technology. It's encouraging to know that some of the best and brightest are developing these opportunities.