Tesla signs three-year pricing deal with Panasonic

Tesla Inc has signed a three-year pricing deal with Japanese company Panasonic associating with the manufacture and supply of lithium-ion battery cells at the Gigafactory located in Nevada, the electric automaker disclosed in a filing on Tuesday.

Tesla and Panasonic have been in talks to expand the battery joint venture’s capacity.

Panasonic hinted in May that it was collaborating in order to develop new batteries with Tesla, possibly with higher capacity.

The automaker said the deal, signed last week, sets the terms for production capacity commitments by Panasonic and purchase volume commitments by Tesla over the first two years of the agreement.

Tesla also amended the general terms and conditions of its collaboration with Panasonic, modifying the term to expire 10 years after Panasonic achieves particular manufacturing milestones.

Panasonic is not a Tesla’s exclusive battery supplier anymore but has been able to turn around the U.S. joint battery business as demand for Tesla’s electric cars increased.

Last month, Tesla reported its third consecutive quarterly profit regardless of the economic impact of the coronavirus pandemic, taking investors by surprise.