Tesla & Panasonic Sign Lithium-Ion Battery Cell Agreement

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Tesla and Panasonic today announced that they have come to an agreement regarding lithium-ion battery cells that will cover the coming 4 years. It’s an exciting announcement, but pretty straightforward, so here’s the actual Tesla news release:

OSAKA, Japan / PALO ALTO, Calif. — Panasonic Corporation and Tesla Motors today announced that the two companies have reached an agreement in which Panasonic will expand its supply of automotive-grade lithium-ion battery cells to Tesla. With this agreement, the two companies update and expand their 2011 arrangement to now supply nearly 2 billion cells over the course of four years. The lithium-ion battery cells purchased from Panasonic will be used to power the award winning 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’s cells combined with Tesla’s proven EV battery expertise have already enabled more than 130 million customer miles driven in Tesla Roadsters and Model S.

“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.”

Together, Panasonic and Tesla have developed a next-generation battery cell technology that provides the highest energy density and best performance cells in the market. Panasonic’s cylindrical cell is a customized technology designed specifically for optimizing electric vehicle quality and life. These cells are integrated by Tesla into the battery pack in a way that enables an industry-leading range of approximately 265 miles for the Model S.

“We are extremely proud to be a strategic partner of Tesla,” said Yoshihiko Yamada, president of the Automotive & Industrial Systems Company, an internal company of Panasonic. “Panasonic will increase its production capacity of lithium-ion battery cells to supply Tesla’s growing needs as it expands its production of EVs.”


Panasonic Corporation is a worldwide leader in the development and engineering of electronic technologies and solutions for customers in residential, non-residential, mobility and personal applications. Since its founding in 1918, the company has expanded globally and now operates over 500 consolidated companies worldwide, recording consolidated net sales of 7.30 trillion yen for the year ended March 31, 2013. Committed to pursuing new value through innovation across divisional lines, the company strives to create a better life and a better world for its customers. For more information about Panasonic, please visit the company’s website at panasonic.net


Tesla Motors’ (NASDAQ: TSLA) goal is to accelerate the world’s transition to electric mobility with a full range of increasingly affordable electric cars. California-based Tesla designs and manufactures EVs, as well as EV powertrain components for industry partners. Tesla has delivered over 15,000 electric vehicles to customers in 31 countries.

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20 thoughts on “Tesla & Panasonic Sign Lithium-Ion Battery Cell Agreement

  • What happened to their negotiations for having a second supplier? I think somebody on cleantechnica wrote an article on a second supplier about two months ago…

    • LG and Samsung are still probably there as Tesla may require more batteries that Panasonic can supply 2017 onwards.

      However, as battery technology is evolving rapidly it is hard to predict what technology is the winner. I personally do not believe a bit on e.g. A123 revolutionary new batteries. 800 Wh/kg batteries are just sweet talk to the investors.

      • Now that A123 is under new management it may make a turnaround. The old management team seemed more like a bunch of Harvard nobility that thought startups should pay the same as established companies. See http://nlpc.org/stories/2012/02/15/after-layoffs-big-exec-raises-taxpayer-funded-a123

        I’m wondering why LG and Samsung are not supplying some of the batteries though. Redundant sourcing seems to be something Tesla would want.

        • From what I was told by a battery and ultracapcitor expert, it’s because Panasonic has a very specific, patented battery. The possibility of Samsung being another supplier just before that discussion, and this expert was very curious how the company could have a battery cell like Tesla needs without breaking a Panasonic patent.

          This is the said expert: http://cleantechnica.com/2013/10/14/lithium-ion-batteries-vs-fuel-cells-commentary-lithium-air-batteries-graphene/

          • I remember closely watching those videos when you first put them up. I don’t have time now but I’ll go back and watch again. I forget what it was that stood out but something did catch my attention with them.

          • Have you got an email address Zach? Or go ahead and send me an email.

      • What he said. (1st part. I have no set opinion on A123 right now)

  • There are what? ~7k cells in a Model S. That would indicate somewhere north of 250,000 vehicles?

    • On a 4 year time-frame there will also be

      – The first replacement packets for the first Model S
      – The promised surprise for Roadster owners (might also be something else)
      – Extra packs for the Battery swapping technology
      – Storage packs for the Super-Charger stations
      – AFAIK storage packs for Solar City
      – Tesla customers such as Toyota and Daimler

      So the Total numbers of Teslas might not be deducted from the number of cells. But it is still a big commitment with impact

      • Panasonic has also talked that they can bring 4 Ah cells into market soon. This could mean that there is needed only 5k cells per car — or it can mean that Tesla will bring 120 kWh model into markets.

        • Musk already mentioned that there will be higher ranges for MS & MX during the last earnings call. decision to stick with max 85 was price driven. As battery prices fall below 200$ for Tesla right now, I am actually expecting an upgrade option in the beginning of 2014 (once Panasonic has ramped up production, Q1/14). Eject I agree on your point impacting the amount of cars produced but would also argue for a second/ third supplier. 3rd platform model is said to be due in 2016 (not the roadster) which should add about 100K new vehicles… lets see… but I think they are ahead of schedule

    • “2011 arrangement to now supply nearly 2 billion cells over the course of four years.”

      With expanding factories we might see production each year grow from 20K to 40K, 60K, 80K, 100K. So he might need more batteries than what he has just locked down with Panasonic.

  • 2 billion cells at 7000 per car is about 285,000 cars. That should hold them over for a bit. So much for the battery controversy. Maybe they won’t need another supplier.

    • I thought there were 18,650 cells in the 85 kWh battery. Did I miss something?

      • “18650” is a unit code for the battery cells that are commonly found in laptop batteries. Tesla uses around 7000 of these ‘18650’ cells in their battery pack.

        Important to know too that the battery cells that Tesla uses weren’t bought off the shelve as they are specially designed for Tesla’s demand.

      • Here is what I found.
        Oct 27, 2012 – If kept between 4.1 and 3.0 Volts the cells capacity will be about 85% of the rated capacity. A 90 kWh battery built with Panasonic 3.4 Ah 18650 cells will then require … 12.24 Wh per cell, then the number of cells required would be about 7350.

        • Thank you both.

  • So lets do the math, 2 bill / 7k = 285k / 4 = 70k vehicles x $86k = $6 billion revenue per year. That is if they can sell 70k vehicles each year. Revenue for 4 years could be 24 billion, not to shabby. At least the battery will not be the limiting factor.

  • 7.30 trillion yen for the year ended March 31, 2013. !!!
    Why do I need to do the math to figure out it’s about 73 Billion $ (US)
    Let’s get the author to do the work once rather than the readers to do it 5,000 times.

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