Tesla and Panasonic sign new three-year battery supply deal

Lately it’s seemed that the relationship between Tesla and Panasonic might have hit a rocky patch. The two companies have been partners at Tesla’s Nevada Gigafactory since the beginning, but more recently, they’ve been seeing other people.

Last year, Tesla said Panasonic’s battery cell production was constraining Model 3 production. In February, the carmaker announced a battery supply agreement with the Chinese firm CATL. Tesla has also been making noises about producing its own battery cells.

However, Reuters reports that the two firms have signed a new three-year pricing deal, and are talking about expanding battery capacity at the Gigafactory.

In May, Panasonic hinted that it was working with Tesla to develop new and improved batteries. CFO Hirokazu Umeda also announced that his company’s battery production at Gigafactory Nevada had finally reached profitability (of course, this was before the pandemic-induced production pause).

At a recent earnings briefing, Mr. Umeda said, “We are seeing strong demand from Tesla beyond the Nevada plant’s current capacity of 35 gigawatt-hours per year,” and added that the two companies were in discussions about expanding the plant’s capacity. The figure of 54 GWh per year was tossed around in some recent talks.

For its part, Tesla said the new deal relates to “specific terms between the parties with respect to pricing, planned investments and new technology, as well as production capacity commitments by Panasonic and purchase volume commitments by Tesla over the first two years of the Agreement.”

It’s pretty vague stuff, but Electrek’s Fred Lambert speculated that Panasonic has agreed to increase its investment in Gigafactory Nevada, and that both increased volume and collaboration on new and improved batteries are in the offing. Will we learn more at Tesla’s Battery Day event, whenever it finally occurs?

Source: Reuters via Electrek