Tesla and Panasonic announce bigger and bolder battery deal image

Today, the two companies said that Panasonic would supply almost 2 billion battery cells to Tesla over the next 4 years, to be used in the Model S sedan and the forthcoming Model X sport utility vehicle.

The new deal was necessary as two years ago the duo made a deal under which Panasonic would supply Tesla with enough batteries to build 80,000 cars in 4 years. But, since Tesla is already on track to deliver more than 21,000 vehicles this year alone and having already set a goal of doubling production by the end of next year, a new supply agreement with Panasonic was clearly coming.

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

With the largest Tesla pack having around 7000 cells, the quantity involved in the new deal is enough for around 300,000 vehicles. Given that sales will climb over time, it seems likely Tesla is ready to reach 100,000+ vehicles sold in the final year of the agreement — five times the 2013 total.

The company just started sales in Europe this summer where the Model S quickly became a hit in Norway and CEO Elon Musk was recently in Germany making his case for the electric car there. Asia is next up for Tesla, where one Chinese buyer was so eager to be the first to own a Tesla, he paid $410,500 for the privilege.

Via Forbes