Panasonic to be Tesla’s Exclusive Battery Supplier for Model 3

Tesla Model X and Model 3

Tesla Model 3 (left) gets unveiled to the public on Mar.31, 2016

According to Tesla Motors Inc’s chief executive and founder Elon Musk, there won’t be another car battery supplier for the company’s Model 3 besides Panasonic. Musk added that reports saying otherwise are plainly wrong.

Musk broke the news on Twitter Tuesday. He noted that Panasonic is also exclusive supplier for his company’s luxury Model S and Model X. According to separate report, Tesla has plans to team up with Samsung too if Panasonic won’t be able to meet demand.

A spokesperson for the company said that indeed the electric vehicle maker works with various battery makers but she declined to comment on each specific agreement with those producers.

Earlier this week, Musk tweeted that Samsung could produce batteries that store solar energy under his Tesla Energy program. Sources familiar with the matter said that 120 tons of Li-Ion cells produced by Samsung were shipped for Tesla in April. Tesla declined to comment on the shipment.

Musk confirmed earlier this week that the South-Korea LG is producing the batteries fro its now-discontinued Roadster model. Reports revealed that the two companies worked together to upgrade the model in 2015.

But Tesla said two years ago that the main supplier for its Nevada-based “gigafactory” battery plant would be Japan-based Panasonic. According to a 2014 agreement, the Japanese company pledged to produce cylindrical lithium-ion cells and make some investments in the Tesla plant.

Tesla’s part of the deal was to assemble the cells into modules and battery packs. The EV maker recently announced that the gigafactory will start cell production in 2017.

The Palo Alto startup is now in a race against time to produce all the necessary batteries for its Model 3 sedan, a cheaper version of Model S which is expected to sell for $35,000. According to the firm, 325,000 pre-orders for Model 3 were submitted in the first week after the vehicle was made public in March.

So now the electric car maker hopes to be able to deliver the vehicles late next year, although there were instances in the past when it failed to stick to promised delivery times.

Plus, Tesla’s plan to make Panasonic its sole battery supplier is highly unusual for the automotive industry. Traditional car makers resort to multiple suppliers to make sure that production doesn’t get clogged and that costs are kept to a minimum through competition.

Image Source: Wikimedia