Panasonic to Supply Tesla With 2 Billion Lithium-Ion Battery Cells From 2014 to 2017

4 years ago by Mark Kane 19

Panasonic's 18650 lithium-ion cell for Tesla Model S

Panasonic’s 18650 lithium-ion cell for Tesla Model S

Panasonic and Tesla Motors announced today a new agreement related to supply of automotive-grade lithium-ion battery cells to Tesla.

Panasonic Energy President Naoto Noguchi Gives Tesla CTO JB Straubel On Of The First 18650 Lithium-ion Cells At Panasonic's Suminoe Factory In April Of 2010

Panasonic Energy President Naoto Noguchi Gives Tesla CTO JB Straubel On Of The First 18650 Lithium-ion Cells At Panasonic’s Suminoe Factory In April Of 2010

This agreement expands upon an earlier deal announced approximately 2 years ago, in which Panasonic was ready to ship cells for 80,000 cars in four years period (from 2012 to 2015).

Now Panasonic is expected to provide nearly 2 billion cells over the course of four years, which we understand as 2014-2017.

“Panasonic Corporation and Tesla Motors today announced that the two companies have reached an agreement in which Panasonic will expand its supply of automotive-grade lithium-ion battery cells to Tesla. With this agreement, the two companies update and expand their 2011 arrangement to now supply nearly 2 billion cells over the course of four years. The lithium-ion battery cells purchased from Panasonic will be used to power the award winning Model S as well as Model X, a performance utility vehicle that is scheduled to go into production by the end of 2014.”

Tesla Model X

Happy Tesla Model X

Furthermore, we see confirmation that Panasonic cells will be used in the Model X.

Battery pack sizes can vary and we don’t know how many cells per car Tesla Motors will use on average, but nearly 2 billion cells means approximately 500 million cells per year. For 5,000-7,000 cells per vehicle, it would be nearly 70,000 to 100,000 vehicles per year on average.

But if Tesla does not sell that many vehicles next year, then the volume in 2016-2017 should be well over 100,000 – maybe even in 150,000-200,000 range..

According to press release, Tesla Roadsters and Model S sedans to date have accumulated more than 130 million customer miles driven.

“This agreement builds upon a multi-year collaboration between Panasonic and Tesla to develop next-generation automotive-grade battery cells and accelerate the market expansion of electric vehicles. Panasonic’s cells combined with Tesla’s proven EV battery expertise have already enabled more than 130 million customer miles driven in Tesla Roadsters and Model S.”

“Together, Panasonic and Tesla have developed a next-generation battery cell technology that provides the highest energy density and best performance cells in the market. Panasonic’s cylindrical cell is a customized technology designed specifically for optimizing electric vehicle quality and life. These cells are integrated by Tesla into the battery pack in a way that enables an industry-leading range of approximately 265 miles for the Model S.”

Tesla Co-Founder and CEO Elon Musk stated:

“This expanded agreement with Panasonic is important to Tesla as we continue to increase the pace of production. We look forward to strengthening our relationship with Panasonic, and I’m confident that this partnership will continue to be an integral part of Tesla’s success for years to come.”

Yoshihiko Yamada, president of the Automotive & Industrial Systems Company, an internal company of Panasonic added:

“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.”

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19 responses to "Panasonic to Supply Tesla With 2 Billion Lithium-Ion Battery Cells From 2014 to 2017"

  1. kdawg says:

    So…. what did they negotiate for price?

    1. Eric Loveday says:

      We’ll let you try to hunt down that info…Good luck

    2. MDEV says:

      +1 good question

    3. Dr. Kenneth Noisewater says:

      Well, if the deal is $7B for 2B batteries, presumably they’ll cost around $3.50 apiece?

  2. IDK says:

    Great news. Could be an indicator of predicted sales growth for the Model S and X.

    1. Brian says:

      Or an indication of sales level and timing of the Model E.

      “But if Tesla does not sell that many vehicles next year, then the volume in 2016-2017 should be well over 100,000 – maybe even in 150,000-200,000 range.”

      This supports Musk’s plan to release the Model E in 2016/2017, and produce north of 100,000/year.

      1. Ocean Railroader says:

        It kind of makes me wounder is Tesla really going to deal with Samsung if Panasonic can raise production. When the model E comes out Panasonic might have to consider building a battery factory next door to the Tesla factory maybe even on the same land next door to it.

      2. Mint says:

        It also gives you an idea of how far out investors are speculating with TSLA. High volumes of the Model E will bring down their average sale price to maybe $60k, and let’s assume gross margin is 20% and fixed costs (R&D, warranty, superchargers, etc) takes away half of that. 200k cars per year will then yield an income of $1.2B/yr, which would still probably not be enough to warrant a $20B market cap.

        TSLA has to execute perfectly to keep its stock valued where it currently is.

  3. pjwood says:

    Perspective: CA just signed into law a 1.325GW(h) statewide utility battery storage mandate. The first state to do it. The contract Tesla just signed allows for around 23GWh (~6 billion mah).

    I saw on one forum that the new CA law may be worded as peak instantaneous supply, but believe it to be in watt-hours. Hope I have the math right. Food for thought.

    1. Rick says:

      Only 1.325 GW? That’s nothing. Doc Brown’s Delorean had more than that.

      1. Brian says:

        I thought he had 1.21 GW. One of us needs to brush up on our trivia.

    2. Mint says:

      Yeah, I’m not sure about that. The actual law uses MW, not MWh. If it was 1325 MWh, then that amounts to ~4 minutes in a statewide blackout. Not particularly meaningful even for much smaller outages and peak handling. From that POV it just sounds like a pilot study (which is actually quite sensible), but I guess it could still be useful for peak buffering over an hour or two.

      As for perspective, if we charge those 23GWh of Tesla batteries 50 times a year, they’ll use 1/4000th of the nation’s annual electricity generation.

      1. pjwood says:

        “they’ll use 1/4000th of the nation’s annual electricity generation.”

        Cue Mr. Fox “That’s easy”

        A battery would make sence as a fast-peaker. I wonder how lossy charging economics would stack up against a 45% efficient combustion gas turbine (no steam, also fast-peak)? Enough watts probably get “spilled” at plants that I wouldn’t be surprised if at least the first charge couldn’t come free?

        1. Mint says:

          Yeah, batteries react so fast that they can charge up on safety margin generation, probably reducing spinning reserve requirements.

          Economics are probably quite favorable. A moderate 5C discharge and $500/kWh overall plant cost would give you $100/watt, provided you only needed 12 minutes, and I doubt fast-peakers can match that. But again, there’s only a limited need for fast reacting, short-duration peaking.

  4. Ocean Railroader says:

    I bet the Panasonic CEO’s and workers feel as happy as a cookie factory who won the contract to supply the cookie needs to a City of a 100,000 Cookie Monsters.

  5. Cavaron says:

    Don’t forget – not every pack will go to a car. Some superchargers will be equipped with packs to store/buffer energy and for battery swaping.

    1. Foo says:

      Right, they may need a lot more batteries (than they would need for individual cars) in order to build-out an “inventory” battery packs that can charge while cars are driving using the “other” porting of the inventory.

      1. aguy says:

        Why don’t they just use the old tesla battery packs the customers have paid them to take off their hands as they upgrade/swap/replace it.

        The old batteries don’t hold 100% charge but they could still hold 60-70% or so for 5-10 years. That would be worthwhile I would think considering they are free.

        What Tesla needs is an electric 18-wheeler truck to haul its batteries around at will.
        Wait I think humans just need an electric 18-wheeler it would revolutionize everything.
        WE NEED AN ELECTRIC 18-wheeler truck tractor trailer that is AUTONOMOUS DRIVING VEHICLE. They could run 24-hours a day and you wouldn’t have to pay drivers.

  6. Efusco says:

    Not sure how you arrive at the conclusion in the Facebook statement that “New battery deal underlines Tesla’s intention to make a lot of inexpensive cars in the very near future!”. There’s no mention of the Model E in this press release.