Tesla Signs Deal With Panasonic, Secures Model S, Model X Battery Supply

Tesla and Panasonic announced earlier today that a battery partnership first announced in 2011 to supply Tesla with battery cells for its Model S Sedan has been expanded and updated, securing Tesla an ongoing supply of lithium-ion battery cells for at least the next four years.

As part of the agreement, Panasonic will supply Tesla with an estimated 2 billion cells between now and 2017, enabling Tesla to expand production of its Model S sedan as well as begin production on its Model X crossover SUV. Due to enter production late next year, the Model X crossover SUV is built around a modified version of the Model S chassis, and like the Model S, will be available to order with either a 60 kilowatt-hour or 85 kilowatt-hour battery pack.

Tesla's deal with Panasonic means more of these can be made.

Tesla’s deal with Panasonic means more of these can be made.

Unlike other electric automakers, which use large-capacity, purpose-built lithium-ion cells in their car’s battery packs, Tesla makes use of a modified version of the same “18650 form factor” lithium-ion battery cells used in the manufacture of laptop batteries. Known for their high energy density and durability, these cells are wired in parallel in low-voltage battery ‘bricks’ to give Tesla the required energy storage capabilities. Then, the bricks are wired in series to create the required high-voltage, high-capacity battery pack.

In total, it’s estimated that there are more than 7,000 of these cells used in every 85 kilowatt-hour Model S battery pack, meaning that Tesla’s latest deal with Panasonic secures enough battery cells to make more than 285,700 battery packs. Some further number crunching leads us to a production figure of 71,428 packs per year, the equivalent of 5,952 per month, or 1,373 per week. Currently, Tesla is estimated to be producing around 400 cars a week, illustrating nicely how its revised deal with Panasonic will help it reach its production goal of 40,000 cars per year by 2015.

“This expanded agreement with Panasonic is important to Tesla as we continue to increase the pace of production,” said Tesla CEO Elon Musk in an official press release accompanying the news. “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.”

While it’s not completely clear, we suspect that the continuing partnership between Tesla and Panasonic marks an end to discussions held between Tesla and South Korean electronics firm Samsung SDI, which Reuters had reported earlier this month as being near completion on a deal to supply Tesla with battery cells for its Model X cars, especially as sources close to Tesla were cited as referring to the Samsung SDI cells not “as yet” being as competitive with cells made by Panasonic.

 

 

 

Nikki Gordon-Bloomfield
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Nikki Gordon-Bloomfield

Self-confessed geek and mother of two, Nikki has been talking and writing about cars ever since she passed her driving test. Back then, her Internet contributions were all classic car-focused. Now, she’s all about greener, cleaner, safer and smarter cars.
Nikki Gordon-Bloomfield
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