Tesla Motors to expand cooperation with Hon Hai

Want China Times, Staff Reporter 2014-06-05

A Tesla electic car on show in Shanghai, April 24. (photo/Xinhua)

Tesla CEO Elon Musk announced at an annual shareholder meeting on June 3 plans to expand the US electric carmaker's cooperation with Taiwanese electronics manufacturing giant Hon Hai, reports our Chinese-language sister paper China Times. Musk said partnerships with manufacturers like Hon Hai will speed up Tesla's production capacity.

Tesla is one of the hottest companies around at present and has seen the price of its stock rise 740% within three months. Its share price is expected to reach US$500 by the end of the year, with Hon Hai also set to get a shot in the arm as a result.

In addition to the current cooperation between the two companies on dashboards and connectors, unit assembly may be included in future arrangements to increase efficiency.

Production of lithium batteries and recharging stations are crucial for the future development of the electric car market and Musk said the company's proposed "Gigafactories" will be able to cut more than 30% off the production cost of lithium batteries for its vehicles by vertically integrating the supply chain. He predicted that at least 200 Gigafactories will be needed to meet the eventual demand from the market.

The Gigafactory that was scheduled to begin construction at this month in a partnership between Tesla and Panasonic is to be delayed until next year however due to infrastructure requirements. Musk said however that three Gigafactories will be built, rather than the original plan to build two, and that their locations will be decided before the end of the year. Possible sites include California, Arizona, New Mexico and Texas.