Panasonic is doubling down on its investment both in Tesla and the electrified future of mobility.

According to MarketWatch, the Japanese electronics company has promised up to $1.6 billion toward the construction of Tesla Motors' lithium-ion battery-producing Gigafactory in Nevada.

The project is believed to cost between $4 and $5 billion to complete. While the Powerwall production began in late 2015, battery cell production is expected to begin in 2017. When it is online, Tesla hopes the surge of inexpensive, long-range batteries will help push its sales to 500,000 units annually by 2020. Panasonic hopes this is true as well. Moreover, it aims to bolster its sales of electronics to carmakers, which is expected to double in the next four years.

"We are sort of waiting on the demand from Tesla," Panasonic President Kazuhiro Tsuga told MarketWatch. "If Tesla succeeds and the electric vehicle becomes mainstream, the world will be changed and we will have lots of opportunity to grow."

Tesla will use its glut of inexpensive batteries to produce its mass-market Model 3, which will go against the Chevy Bolt as the entry-level but long-range EV.

Volkswagen and General Motors have similar lithium-ion battery production deals with South Korean LG. Back in Nevada, however, Tesla and Panasonic face another threat. Faraday Future will be breaking ground on its $1 billion, 3-million-square-foot production facility backed by Chinese tech giant Letv. Together, FF and Letv aim to take on Tesla for dominance in the electric vehicle market.

That said, the investment is a risky one. To date, lithium-ion battery producers have struggled to remain profitable — especially as oil prices continue to drop. Regardless of how it all pans out for Tesla, Panasonic and the others, it's clear that the future of mobility will at least be electrically driven. Whether or not that will be as profitable as some companies hope is another question.

Update: We updated the anticipated timeline of the Gigafactory production schedule.