Tesla, Panasonic ink deal on electric car battery cells

Tesla Motors announced on Tuesday that it has finalized an agreement with Panasonic for automotive-grade lithium-ion battery cells.

The cells will be used in Tesla's new electric sedan, the Model S. The contract guarantees battery cell availability for the production of more than 80,000 vehicles over the next four years, and helps Tesla keep costs down and margins up on the model.

Panasonic supplies several automakers worldwide with nickel-type cathode battery cells and is the world's largest battery cell manufacturer. It first entered a supply agreement with Tesla in 2009; the company invested $30 million in the startup the following year.

Since Tesla supplies batteries and electric powertrains to Toyota and Mercedes-Benz parent company Daimler, the deal could have a trickle-down (trickle-up?) effect in the greater industry.

"Incorporating Panasonic’s next-generation cells into Model S batteries will ensure unrivaled range and performance," Tesla chief executive Elon Musk said in a statement.

This post was originally published on Smartplanet.com