Tesla Signs 3-Year Lithium Battery Pricing Deal with Panasonic

Tesla stated that it had signed a 2020 lithium battery pricing agreement with battery maker Panasonic for three years. The 2020 Pricing Agreement (effective as of April 1, 2020, until March 31, 2023) is about lithium-ion cells produced at its in Nevada (the cylindrical 2170-type used in Model 3, Model Y and energy storage systems).

Besides, the company also revised the general terms and conditions of cooperation with Panasonic. The revised terms will expire after Panasonic achieves a specific production for 10 years.

Before Tesla came to build a factory in China, Panasonic was its only supplier of power batteries. The two parties signed a "super factory" agreement in July 2014 and established a joint venture in Nevada, the United States. However, it is difficult for the company to increase its production capacity. The reason for the growing tension is said to have delayed the production of Model3 cars. However, due to the continued surge in electric vehicle demand, the lithium battery maker's 2019 US battery business is still profitable.

However, from the current perspective, the relationship between the two sides has eased. On May 18, Panasonic chief financial officer Hirokazu Umeda said at the financial report briefing that the Nevada super factory Gigafactory 1 jointly operated by had a capacity of 32 gigawatt-hours per year by the end of March. Through material and technology improvements, it is expected to be reached 35GWh in fiscal 2021 (April 2021 to March 2022).

Against the backdrop of the impact of the COVID-19 epidemic on the global auto market, Tesla bucked the trend and achieved its third consecutive quarter of profitability, which made investors released.

Tesla's first-quarter financial report for 2020 shows that the company's total revenue for Q1 was 5.985 billion US dollars, an increase of 32% from the 4.541 billion US dollars in the same period last year. The company reported a profit during the first quarter of $16 million. The Nevada Super Factory finally achieved profitability in the Q4 of 2019 and Q1 of 2020 after losing money for years and is expected to continue to maintain profitability in the coming period.

Besides Panasonic lithium battery suppliers, South Korea's LG Chem and CATL have also become partners of their power batteries after the Tesla Shanghai plant is completed and put into production. Both battery products will provide energy for the domestic Model 3.

• < Prev
• Next >