Tesla Inc. (TSLA) said on Tuesday that it had signed a three-year pricing agreement with Japan’s Panasonic Corp. (6752.T) for the manufacturing and supply of lithium-ion battery cells at the Gigafactory in Nevada.
Tesla said that the agreement is effective from April 1 until March 31, 2023, which sets the specific terms between the two parties for pricing, planned investments, and new technology. It also determines Panasonic’s production capacity commitments and Tesla’s purchase volume commitments over the first two years of the agreement. The deal’s financial terms were not disclosed.
“Sentiment was positive across our meetings; investors appear increasingly willing to look through near-term noise and focus on future (2021+) revenue and earnings growth drivers,” Robert W. Baird & Co.’s Senior Analyst Ben Kallo wrote in a note to investors. He adds, “This is reasonable, in our view, given the numerous projects underway which could meaningfully contribute to growth over time. Nearer term, the upcoming Battery Day and subsidies in Germany were areas of focus.”
In November 2010, Panasonic invested $30 Million in a private placement of Tesla common stock.