This archive report was first published on 19 June 2020.
On April 1, 2020, Tesla and Japan's Panasonic signed a three-year pricing deal for the manufacture and supply of lithium-ion battery cells. The agreement sets the terms for production capacity commitments by Panasonic and purchase volume commitments by Tesla over the first two years.
The deal also includes an amendment to the 2014 partnership agreement between Tesla and Panasonic, which modifies the term to expire ten years after Panasonic achieves certain manufacturing milestones.
Notably, this deal comes as Tesla is exploring the use of lithium iron phosphate (LFP) batteries in its China plant, which would eliminate the need for cobalt – one of the most expensive metals in electric vehicle (EV) batteries.
As reported by Yahoo Finance, Panasonic invested $30 million in a private placement of Tesla common stock in November 2010.
Figure: Tesla Gigafactory, Nevada
Additionally, Tesla's Model 3 sales in China tripled in May following a price cut of about $2,818, leading to a significant spike in demand.
