Tesla has entered into a new battery supply deal with Panasonic.
According to an SEC filing from June 16, the two companies have amended the general terms and conditions between Tesla and Panasonic, originally outlined in their agreements from October 1, 2014.
A new three-year agreement calls for Panasonic’s supply of 2170 lithium-ion battery cells to Gigafactory 1 in Sparks, Nevada, where the two companies hold joint operations. Panasonic has agreed to production capacity commitments under the stipulation that Tesla meets purchase volume commitments over the first two years of the agreement.
Also of note in the FORM 8-K filing is the mention of a new pricing agreement between Tesla and Panasonic.
“Tesla and Panasonic also entered into the 2020 Pricing Agreement (Gigafactory 2170 Cells) (the “Agreement”), effective as of April 1, 2020 until March 31, 2023, relating to the manufacture and supply by Panasonic of lithium-ion battery cells at Gigafactory Nevada.”
In May, Tesla and Panasonic entered discussions to begin expanding the battery and powertrain production facility in Nevada. Due to the increased demand for Tesla’s electric vehicles, the two companies saw an advantage in expanding the plant. Both parties were also hinted toward the possibility of developing new battery cells, “possibly with higher capacity,” Reuters reported.
The announcement of the partnership comes before Tesla’s Battery Day, which was initially scheduled for April 2020. However, the COVID-19 pandemic postponed the event, and it has currently not been rescheduled. CEO Elon Musk stated that Tesla was considering a hybrid event that would be half-webcam and half-physical event, but the company opted against the option.
Even though Tesla has not determined a new date for its Battery Day event, the company has continued to make strides toward developing its batteries. Tesla has openly been working toward a million-mile battery for its electric vehicles. The cell assembly would also be useful for its energy products and is estimated to have a twenty-year lifespan. The company is also working toward creating cathode chemistries that are free of or contain less cobalt than previous cell makeups.
Ultimately, the company’s goal is to end a shortage of batteries and begin a massive production phase of lithium-ion cells that will keep up with the increasing demand for Tesla’s electric cars. After Elon Musk announced last week that it would bring its highly-anticipated Semi to “volume production,” it is evident that Tesla’s cell shortage is coming to a close, and the company is on the brink of price parity with gas cars.