How is Elon Musk going to produce his vaunted $35,000 Tesla when EV batteries are so expensive? By making his own. Tesla has signed a deal with Panasonic that'll see the pair team up to build the Gigafactory. It's from here that vehicle packs and cells will be mass-produced on an unprecedented scale that costs are expected to tumble. According to the announcement, Tesla will build the plant and maintain it, while Panasonic supplies the lithium cells, plant, machinery and manufacturing equipment to make the whole thing happen. The Gigafactory is expected to produce 35GWh of cells and 50GWh of power packs by 2020 and will be built just as soon as Musk and co. work out which state -- Arizona, New Mexico, Nevada or Texas -- depending on which has the better tax rebate renewable energy resources.