Tesla and Panasonic agree electric car battery deal

Panasonic to provide nickel-based Lithium-ion cells for Tesla's newest battery packs

US electric car manufacturer Tesla Motors yesterday signed up another high-profile technology partner, announcing that it is to work with electronics giant Panasonic to develop next-generation nickel-based Lithium-ion battery cells for its vehicles.

The two companies provided few details about the partnership, revealing only that they will work together to optimise battery cells for use in electric vehicles and that Tesla will use Panasonic's battery cells in its newest battery packs.

The alliance will further fuel speculation that Panasonic is to provide the batteries for Tesla's planned Model S sedan. However, the company was quick to offer reassurance to its existing battery suppliers, stating that its "current battery strategy incorporates proprietary packaging using cells from multiple battery suppliers".

The company added that Panasonic's new cell will be compatible with other cell form factors, enabling the company to continue to use cells from multiple suppliers.

The deal represents something of a coup for Panasonic, which is halfway through a three-year $1bn (£624m) battery research and development programme and is poised to begin production of Lithium-ion cells at a new factory in Japan in April.

The company also completed its acquisition of a majority stake in rival electronics firm Sanyo last month, which was driven in large part by the company's success in providing batteries for hybrid vehicles.

"Being selected by Tesla to provide cells for its current and next-generation EV battery pack is a tremendous validation of Panasonic’s nickel-based chemistry and the extensive investments Panasonic continues to make in Lithium-ion R&D and production," said Naoto Noguchi, president of Panasonic Energy Company.

Meanwhile, Tesla also announced yesterday that it has further strengthened its presence in Europe, hiring former Fiat executive Cristiano Carlutti to head up its operations in the region.