Panasonic Corporation and Tesla Motors have expanded their 2011 supply agreement so that Panasonic will now supply nearly 2 billion automotive-grade lithium-ion battery cells to Tesla through 31 December 2017 at long-term preferential prices. Panasonic also has a position in Tesla, having purchased $30 million of Tesla’s common stock in a private placement transaction that closed in November 2010.
The lithium-ion battery cells purchased from Panasonic will be used to power the Model S as well as Model X, a performance utility vehicle that is scheduled to go into production by the end of 2014.
This agreement builds upon a multi-year collaboration between Panasonic and Tesla to develop next-generation automotive-grade battery cells and accelerate the market expansion of electric vehicles. Panasonic cells have powered more than 130 million customer miles driven in Tesla Roadsters and Model S.
In its quarterly report filed in August 2013 with the SEC, Tesla noted that:
Our business is dependent on the continued supply of battery cells for our vehicles’ battery packs as well as for the battery packs we produce for other automobile manufacturers. While we believe several sources of the battery cells are available for such battery packs, we have fully qualified only a limited number of suppliers for the cells used in such battery packs and have very limited flexibility in changing cell suppliers. Any disruption in the supply of battery cells from such vendors could disrupt production of Model S and of the battery packs we produce for other automobile manufacturers until such time as a different supplier is fully qualified.—Tesla Quarterly Report (10Q) for quarter ending 30 June 2013
In June 2013, Panasonic announced that shipments of its lithium-ion battery cells for Tesla Motors’ Model S sedan surpassed 100 million units. The battery cell used in the Model S was developed by Panasonic and Tesla together to achieve leading energy density and performance for an 18650-size cylindrical lithium-ion battery cell.
Currently, the Model S pack comprises up to around 7,000 Panasonic NCR18650A 3100 mAh 18650-size cells using a Lithium nickel cobalt aluminum (NCA) chemistry and proprietary cathode geometry developed by Panasonic and Tesla. The cathode formulation has been specifically optimized for EV applications.
This expanded agreement with Panasonic is important to Tesla as we continue to increase the pace of production. We look forward to strengthening our relationship with Panasonic, and I’m confident that this partnership will continue to be an integral part of Tesla’s success for years to come.— Tesla Co-Founder and CEO Elon Musk.
Panasonic’s cylindrical automotive cell is a customized technology designed specifically for optimizing electric vehicle quality and life.
We are extremely proud to be a strategic partner of Tesla. Panasonic will increase its production capacity of lithium-ion battery cells to supply Tesla’s growing needs as it expands its production of EVs.—Yoshihiko Yamada, president of the Automotive & Industrial Systems Company, an internal company of Panasonic
Panasonic established the Automotive & Industrial Systems Company earlier this year.