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Tesla Inks Battery Agreement With Panasonic

By Scott Levine – Jun 17, 2020 at 11:25AM

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These two companies are charging up their partnership for several more years.

Revisiting a partnership which originated in 2014, Tesla (TSLA 2.51%) revealed in a regulatory filing yesterday that it and Panasonic Corporation (PCRFY -2.18%) "entered into an amendment and restatement" of the general terms and conditions of their agreement relating to Panasonic's manufacturing of lithium-ion battery cells for Tesla at its Gigafactory in Nevada. According to the revision, the agreement will expire 10 years "after Panasonic achieves certain manufacturing milestones."

In addition, Tesla revealed that it had entered into a pricing agreement with Panasonic lasting through March 2023 related to Panasonic's manufacturing of lithium-ion battery cells at the Gigafactory. Included in the terms of the agreement are production commitments for Panasonic and purchase volume commitments for Tesla over the next two years.

Tesla's Model S.

Image source: Tesla.

While Tesla and Panasonic have recommitted to working together for several more years, it was only four months ago that the relationship between the two companies seemed more tenuous. Panasonic stated that it would "begin to wind down U.S. production of photovoltaic cells and modules at Tesla's factory in Buffalo, NY, in line with the global solar strategy led by its Life Solutions Company." Panasonic's decision, however, didn't come as much of a shock, since Tesla's solar business hasn't grown much following its acquisition of SolarCity.

Besides expending energy in the U.S. on its battery business, Tesla has also beed focused on China. Last week, for example, China granted approval for Tesla to begin manufacturing lithium iron phosphate batteries for the Model 3. 

Scott Levine has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Tesla. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Tesla, Inc. Stock Quote
Tesla, Inc.
TSLA
$282.94 (2.51%) $6.93
Panasonic Corporation Stock Quote
Panasonic Corporation
PCRFY
$7.17 (-2.18%) $0.16

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