Tesla Motors Inc. announced that it and Panasonic Corp. have launched mass production of lithium-ion battery cells at a plant being jointly built by the two companies outside Reno, Nevada. The Gigafactory is expected to be a major foothold for Panasonic to expand its production of battery cells for electric vehicles, considered a promising area of growth.

Tesla hopes that mass battery production at the plant will help lower production costs for electric vehicles and promote their sales. Tesla constructed the plant's buildings. At the plant, Panasonic produces batteries while Tesla processes them into packs.

The plant started part of operations in July 2016. The plant will make home- and office-use batteries for the time being and later expand the production to include batteries for electric vehicles. The plant is set to have an annual production capacity for batteries for 500,000 electric vehicles next year.

Tesla expects the new plant to help reduce battery production costs by more than 30%. The company plans to put its new Model 3 sedan on sale 2017 for $35,000, about half the price of its existing model.