Tesla Motors Inc (TSLA) And Panasonic Corporation (6752) Expand Deal For Battery Cell Supply
Tesla Motors Inc (NASDAQ:TSLA) and Panasonic Corporation (TYO:6752) have expanded on a deal where Tesla Motors will sharply increase the number of lithium ion battery cells that they receive from Panasonic. This deal testifies the confidence that U.S. has in the future of all-electric vehicles. Panasonic Corporation (TYO:6752) is already the primary supplier of lithium-ion batteries to Tesla Motors Inc (NASDAQ:TSLA).
Panasonic will now provide nearly 2 billion lithium ion cells to Tesla Motors Inc (NASDAQ:TSLA) in the four years to 2017. Previously Panasonic Corporation (TYO:6752) supplied Tesla Motors Inc (NASDAQ:TSLA) 200 million cells in the two years ending this December.
The cells that Panasonic Corporation (TYO:6752) are supplying will go into the Tesla Model S and the new Tesla Model X, which will be going into production by the end of 2014.
Tesla Motors Inc (NASDAQ:TSLA) has not ruled out other suppliers to work with as part of this deal. Tesla Motors Inc (NASDAQ:TSLA) has a goal to diversify their supply chain in order to foster competition among makers for key components and ensure that Tesla has a stable supply of parts.
“Tesla is in talks with Samsung, LG, and other manufacturers, and will continue to discuss future supply with them and to evaluate their technology,” stated Tesla Motors Inc (NASDAQ:TSLA) spokeswoman Atsuko Doi.
Tesla Motors Inc (NASDAQ:TSLA) worked with LG Electronics and Samsung Electronics for lithium ion cells for the Tesla Roadster sports car.
Panasonic Corporation (TYO:6752) is building an additional production line for small batteries at a facility in Osaka, Japan. They will also restart another line at a separate Osaka plant.
The average Tesla Model S uses around 7,000 cells, which means that this deal will provide Tesla enough power for around 285,000 Model S vehicles. Tesla Motors Inc (NASDAQ:TSLA) is building over 400 vehicles per week and CEO Elon Musk wants to make that 800 per week in late 2014.
“This expanded agreement with Panasonic is important to Tesla as we continue to increase the pace of production,” said Tesla Co-Founder and CEO Elon Musk. “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.”
[Source: Reuters]This article was written by Amit Chowdhry. You can follow me at @amitchowdhry or on Google+ at +AmitChowdhry