Tesla Motors owes $1.7 billion to Panasonic Corp for electric vehicle batteries

Tesla Motors Inc had an obligation to pay a total of about $1.7 billion to Japan’s Panasonic Corp as of Sept. 30 for electric vehicle battery cells made at Tesla’s gigafactory in Nevada, the carmaker said in a regulatory filing. The $1.7 billion figure is unchanged from filings in October. Panasonic, Tesla’s longstanding battery partner, agreed in 2014 to invest in equipment, machinery and other manufacturing tools at the gigafactory, which will make cylindrical lithium-ion cells for Tesla’s cars. Tesla has said it expects to start making batteries at the $5 billion plant by the end of the year. The batteries will be used initially in Tesla’s energy products and later in its cars. Panasonic, which plans to contribute up to $1.6 billion to produce battery cells for Tesla, cut its annual profit forecast on Monday after bringing forward some of its investment in the gigafactory in anticipation of strong demand. Tesla’s shares were down 0.8 percent at $189.39 in morning trading on Wednesday. Up to Tuesday’s close, the stock had fallen about 21 percent this year. The Tesla gigafactory is a massive structure with operational floor space of  1.9 million square-feet. and is expected to commence operations from 2018. The energy neutral gigafactory will derive power from wind and solar energy. With inputs from Reuters