Tesla Updates and Expands Battery Supply Agreement with Panasonic (TSLA)
Turns out all the recent chatter about Tesla Motors (NASDAQ: TSLA) possibly considering a new battery supplier to power its electric cars was, indeed, just talk – or at least premature.
On Wednesday Tesla signed a new agreement with Japan's Panasonic (OTC: PCRFY), that updates and expands their 2011 deal to supply automotive-grade lithium-ion battery cells to Tesla.
Panasonic says the new arrangement means they will now supply nearly two billion cells to Tesla over the next four years.
“This expanded agreement with Panasonic is important to Tesla as we continue to increase the pace of production,” Tesla Co-Founder and CEO Elon Musk said in a joint press statement. “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.”
The Panasonic batteries will reportedly be used by Tesla for both its Model S sedan and the upcoming Model X – a “performance utility vehicle” scheduled to go into production in late 2014.
The ValueWalk web site, meanwhile, quotes a Bloomberg New Energy Finance analyst – who believes the Tesla deal may mean an additional $7 billion in sales for Panasonic, while solidifying the company's position as the largest supplier of rechargeable electric batteries for cars.
But ValueWalk also suggests the Panasonic/Tesla agreement doesn't necessarily mean the car-maker won't be getting batteries from other suppliers.
Earlier this month Reuters reported that Tesla and Samsung SDI – a division of Samsung Electronics (OTC: SSNLF) – were in talks about batteries. The wire service said Tesla offiicials believed their company was looking to diversify its supply chain “to foster competition among makeers of key components and to ensure Tesla has a stable supply of parts.”
And, according to ValueWalk, Tesla is also believed to be in talks with South Korea's LG Electronics (OTC: LGEIY).
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