Tesla is pulling out all the stops when it comes to future battery cell supply.
Tesla just submitted a Form 8-K to the SEC that references a new 2021 pricing agreement with partner battery supplier Panasonic. The deal is specific to Panasonic cells produced in Japan, and the agreement will run from October 1, 2020 to March 31, 2022.
Tesla attempts to keep almost everything in-house. However, with its rapid growth, and competition finally ramping up, it needs to do everything it can to secure as many battery cells as possible. While Tesla is working on making its own battery cells, it’s also acquiring battery tech companies and leaning on several battery cell suppliers to assure it has all the cells it needs going forward.
Tesla produced and delivered about 500,000 vehicles in 2020. It plans to ramp up its efforts in a big way over the next several years, with multiple factories across the globe. However, the company has always maintained that it remains forever production constrained. The competition for battery cells is already an issue, and as other automakers start pushing harder toward an EV future, battery cells will become increasingly difficult to secure.
The official Form 8-K reads:
“On December 29, 2020, Tesla, Inc. and Tesla Motors Netherlands B.V. (together, “Tesla”) and Panasonic Corporation of North America and Sanyo Electric Co., Ltd. (together, “Panasonic”) entered into a 2021 Pricing Agreement (Japan Cells) (the “Agreement”), effective as of October 1, 2020 until March 31, 2022, relating to the supply by Panasonic of lithium-ion battery cells manufactured by Panasonic in Japan. The Agreement is subject to the Supply Agreement between Tesla and Panasonic (and/or their respective affiliates) dated October 5, 2011, as amended, and sets forth, among other things, specific terms with respect to pricing, production capacity commitments, purchase volume commitments and planned investments over the term of the Agreement.
Tesla and Panasonic (and/or their respective affiliates) have also entered into other previously disclosed agreements relating to the production and supply of lithium-ion battery cells.”
To date, Panasonic battery cells made in Japan have been used for Tesla Model S and Model X battery packs. If that continues, there may be some unknown updates coming to the Silicon Valley electric automaker’s flagship vehicles. Moreover, Tesla recently announced an 18-day shutdown to Model S and X production at its primary factory in Fremont, CA.
Details have not yet been announced about the new pricing agreement. However, we do know that Panasonic already has plans to build a test production line for Tesla’s new 4680 cells.
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