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Panasonic and Tesla expand supply agreement for Li-ion cells; nearly 2 billion through 2017

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.



A good long term contract for Panasonic and Tesla.

Will the cell performance be progressively improved?

If so, can Model S e-range be increased to 400+ miles by end of 2017?


I don't want a 400+ mile Model S. I want a 200 mile Model S that weighs 500lbs less.


Last October some leader was calling Tesla a loser.

Thank goodness he is the loser.


Why not 400 miles and 500 lbs less?

Both wishes may very well be possible by 2020/202 or so.

Roger Pham

I want a 50-100-mile model that also includes a 2-cylinder engine that will give unlimited range, hundreds of lbs lighter and thousands of USD less expensive. Tesla can collaborate with Toyota in designing such a PHEV. What Tesla has is in design, styling, marketing, and quality of electric drive train and battery. What Toyota can help with is in the integration of the engine to make it a must-have PHEV in the luxury class.


RP.. advancement in battery technologies will make on board gensets redundant within 10 years or so and even by 2020 if you are satisfied with 400 miles range.

A Tesla Model KK or ZZ with 800+ Wh/Kg lower cost batteries will give you all the range of today's ICEVs at competitive price.

Roger Pham

Would Panasonic license the 800-Wh/kg technology from A123-Wanxiang-Solid Energy? or 400-Wh/kg tech from Envia?
If not, since Tesla already has working relationship with Toyota, why not have the world #1 HEV maker help develop a PHEV version in order to conserve battery and to make FOUR PHEV's of 20kWh each for the same amount of battery to make ONE BEV of 80kWh pack?


Because Tesla and Musk have no desire to make a hybrid, nor is there any need for them to do so. Tesla makes EV's, let others mess around with the soon to be outdated hybrid market.

Roger Pham


Tesla has no desire to make a hybrid because it would be too hard or too complicated?
That's a valid point, because a PHEV will require more parts and more complexity, hence more R&D investment. For that reason, I propose that Tesla could work together with Toyota in a cost-sharing relationship, so that the resultant Tesla PHEV can also be offered under the Lexus badge, hence reducing the development cost for Tesla and Toyota, while retaining the excellent emotional appeal, design, and quality of Tesla cars. I believe that Tesla is already making a BEV model for Toyota.

>>>>"Nor is there any need for them to do so [make a PHEV]."

The current EV market indicates much higher preference for PHEV over BEV. Together, the Chevy Volt and Ford C-Max Energi outsold BEV's by many folds. Paying attention to the market and customer preferences is vital for economic success of any company. However, neither the Volt nor the Energi offer the level of performance, luxury nor the status that a Tesla can offer. I and other financially-capable yet environmentally-responsible customers wanting a PHEV of the same quality and design of a Tesla BEV now has no choice!

The hybrid market won't be outdated for a long time because of advantages of a PHEV over a BEV:

1. 4x the number of PHEV's can be made for each BEV for the same amount of battery.

2. Waste heat from the engine can be used for winter heating, thus greatly increase efficiency of liquid fuels. In a BEV charged from NG or coal power plants, the waste heat will be lost!

3. Very rapid energy fillup at the rate of 22MW for PHEV, that no fast-charging center can ever match.

4. Able to refuel everywhere without any fast-charging infrastructure. The money invested in building fast-charging stations can be used to develop PHEV's instead!

5. Option for a plug-out in case of grid electricity black out or for camping trip. Great in the case of natural disasters where your neighbors are shivering in the cold for weeks or suffer from sweltering heat due to lack of grid electricity!

6. Smaller and lighter battery pack that can be used the heck out of it and replaced before losing capacity due to battery aging (calendar life degradation). It is economically much better to replace a 20-kWh pack every 5-7 years, depending on usage, than to keep a 80-kWh battery for 10-12 years and then have to replace it due to battery aging lost of capacity. What if you don't drive your 80-kWh-Tesla much and yet have to replace the battery in 10 years due to aging? Ouch! A lot of money down the drain! Many owners of high-end vehicles use them as trophies on only certain occasions. My father's Lexus and my brother's Porsche 911 turbo got driven only ~30k miles in 10 years. Imagine a 80-kWh pack replaced after only 30k miles of driving. It will feel much better to replace a 20-kWh pack after 10 years instead.

7. Why invest too much in current battery tech when newer and much better battery techs will be available in the near future?

8. Battery fire hazard: The smaller the pack, the lower the risks! It's just that simple. Just ask Boeing about it!


HEVs and PHEVs are interim technologies to increase ICEs effective fuel consumption performance until affordable long range BEVs become a reality (by 2020 or so?)

Roger Pham

Why wait until 2020, when today's already affordable PEV's such as the Chevy Volt and C-Max Energi or Fusion Energi, and Prius PHV, etc...with infinite range, are already available at your nearest dealers?

Better and cheaper batteries will allow for PHEV's to overtake the current HEV's and ICEV's. The Plug-out ability of a PHEV will be a must-have in the near future of climate change with higher risks for natural disasters.

Better batteries will give these PHEV's even more plugged-in range to almost eliminate liquid fuel consumption, and allowing more downsizing of the ICE, better internal space, lighter weight, and eventually even lower cost than a comparable ICEV, since the ICEV will have twice the number of cylinders and a complex transmission, while PHEV has no transmission!

Soon, PHEV's and H2-FCV's will be mainstream vehicles, while all the rest such as HEV's, BEV's, ICEV's will be niche vehicles only.

Integrate the solar PV cells into the upper surfaces of a PEV and the vehicle will hardly ever need to be plugged in at all, perhaps only on cloudy days.


RP... I agree with you that PHEVs are an excellent INTERIM option to reduce liquid fuel consumption and oil import (for USA, EU, Japan, China and many other countries without sufficient oil reserves).

As you so well said, when batteries performance increase, the on-board genset will be used less and less and eventually NOT AT ALL. That is when PHEVs become BEVs? Many will remove the on-board genset? It is just a matter of time. Post 2020 will see a switch from PHEVs to BEVs. By that time Tesla may have 4 or 5 long range BEV models on the roads. Others will follow.

Roger Pham

Don't you want to have a genset around your house in case of prolonged power outage? A big snow storm or hurricane can take out power for many days. A PHEV with generous fuel storage can keep your house powered for many days.

When future houses will have FC's powered by H2 supplied by piping, then you will be able to generate your own power and use CHP for winter home heating. At that time, FCV's will become popular due to highly available H2 supply everywhere. So, yes, the PHEV is an interim step until H2-FCV will be fully entrenched.

I suspect that BEV-startup companies choose to do remain strictly with BEV because it takes too much research and development to design and build a PHEV, the latter is more complicated from both hardware and software aspects. It is for that reason that I proposed that Tesla to team up with Toyota to produce an ultimate, a super-duper PHEV of all voiture ne plus ultra! Something that will be a must-have for nearly aspiring millionaires and already millionaires! A work of art, no, a master piece of all time from the best maker of BEV's and the best maker of HEV's combined!

The problem with BEV for long range is the fast charging requirement. Stations cost money to construct, yet not often used because most people will charge at home for most of the time. Fast charging is hard on the batteries and will decrease their cycle life. BEV's with large-capacity battery pack will never able to utilize most of the battery's cycle life before calendar life steps in. Furthermore, constraint in future supply of Lithium and other battery-making raw materials may raise future battery prices and will limit the number of BEV that can be built. PHEV's and HEV's will greatly reduce the material-intensive issue of BEV.

Furthermore, it takes a lot of energy to make batteries. If you cannot exploit most of the battery cycle life before calendar-life degradation, then the ROIE (Return of Invested Energy) in BEV may be less than ICEV and BEV's may result in higher overall CO2 emission. This is perhaps the point that Kit P mentioned repeatedly before. "Hauling around a lot of battery is never a good idea." (in Kit's famous words)

Roger Pham

Furthermore, Harvey, when got stuck in a Canadian snowstorm or snow bank on the side of the road for potential 1-2 days or more, which vehicle would you rather be driving: A BEV with 80 kWh of battery on board, or a PHEV with 10 gallons of gasoline on board capable of generating 330 kWh of life-saving thermal comfort?
For window defrosting and cabin heating in the winter, would you rather use the waste heat of the ICE on board, or depleting precious battery charge from the 80-kWh battery pack? In cold Northern Climates, that's probably 6 months out of the year that heating is required!

In warm climates that do not require cabin heating nor windshield defrosting, the ambient heat will degrade the batteries rapidly and it especially important to have just enough battery on board to make a PHEV-20 or 30, in order to use the heck out of its cycle life in a short amount of time, and to replace it for a fresh pack after some years. This is what's happening to the shortened battery life of the Nissan Leaf BEV's the in hot desert environment of New Mexico and Arizona.

HarveyD have a many very good points but you can look at them different ways.

Many future extended range BEVs will have 160+ kWh battery pack on board. That will be enough for your home for an average of 16 days of essential e-energy during power failures. It should be more than enough for most cases?

The same battery back should keep a 100 to 120 cu ft. car cabin at +20C to +22C for 48+ hours when stuck in a very bad snow storm. That is also more than enough for most cases.

Future FCEVs (Toyota 2015) will have 500+ Km range between 3 minutes stops to fill up or equivalent to most current ICEVs. That is a bit less than a 160+ kWh battery pack but it will also be more than enough for emergency services stated above.

It seems than 500+ Km range affordable FCEVs may be around a few years before 500+ Km range BEVs but both may be around by 2020 or so.

It's just a matter of time....

Roger Pham

Good point, Harvey.

A BEV and FCV can use electric-motor-powered heat pump instead of resistive heating, thereby reducing energy required. If the COP of the heat pump is 3, then only 1/3 of the energy will be needed as compared to that of a ICEV or PHEV. |The onboard electric-powered A/C system can double as a heat pump to avoid major investment, only a few additional valves and circuitry will be needed.

So, a 80-kWh battery pack can deliver as much heat as a 200-kWh fuel tank, while a FCV with 160-kWh H2 tank can deliver as heat as a 400-kWh fuel tank, minus the efficiency loss in the BEV's circuitry and in the FC stack and power controllers.

Furthermore, if the car's occupants are well dressed in winter clothing, then the cabin's temp can be kept at below 50 degrees F, and even resistive heating from the battery or FC would suffice for several days, depending on the level of insulation of the car. This additional resistive heater can be provided as a backup in case of failure of the heat pump.


RP...we are now saying about the same thing, i.e. that future BEVs with large battery packs (2X Tesla S85) and 500+ Km range FCEVs will be as useful as PHEVs for emergency backup power and superior to current ICEVs?

In other words, anti EVs posters will have a have time to downgrade evolution (ground vehicle electrification)in the post-2020 era?


Only time will tell which technology (BEVs or FCEVs) will be best for extended range vehicles, specially for cars and small trucks? Both technologies be survive for a long time.

Wouldn't be surprised to see larger vehicles, such as heavy trucks, buses, locomotives, heavy machinery, ships and heavy machines, with lots of room for hydrogen tanks, go for quick charge extended range FCEVs + ultra-cap instead of plain EV approach.

The essential infrastructures will follow. It will be a huge business opportunity for Oil firms (and others) with very deep pockets. The soonest the better for USA and EU countries with major unemployment problems and/or huge trade deficits due to crude oil imports.

Countries like China, S-Korea and Japan will jump on the opportunity as a way to solve unacceptable pollution levels in their major cities.

Roger Pham

Thank you, Harvey, for sharing the same opinion as mine! The more people in our gov and business will see this, the sooner we will be able to simultaneously solve our environment problems and socio-economic problems, to enjoy a stable and properous future. Please continue to spread the idea far and wide and in different forums (fora?).

A.C. R.

This is very promising.

Simple calculation: 2 billion cells, 7000 cells/vehicle, gives 285,000 vehicles!

This is an agreement, effectively, for almost three hundred thousand electric vehicles!!


> I want a 50-100-mile model that also includes a 2-cylinder engine that will give unlimited range, hundreds of lbs lighter and thousands of USD less expensive.

You want a BMW i3 ;-)

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