By Silicon Valley / San Jose Business Journal

Panasonic Corp. and electric vehicle maker Tesla Motors Inc. said Tuesday they have completed a supply deal for automotive-grade lithium-ion battery cells.

Osaka, Japan-based Panasonic (NYSE:PC), which makes the battery cells, will be supplying its products for Palo Alto-based Tesla's (NASDAQ:TSLA) Model S electric sedan.

Tesla is expected to receive enough battery cells to build more than 80,000 vehicles over the next four years. It has reservations to date for more than 6,000 Model S vehicles.

Panasonic and Tesla have an existing multiyear collaboration formed in 2009 to develop next-generation automotive-grade battery cells and speed the market expansion of electric vehicles. Last year, Panasonic invested $10 million in Tesla.

"It is a powerful endorsement of our technology that Panasonic, the world's leading battery cell manufacturer, has chosen to partner with Tesla to advance electric vehicle performance and value," said Tesla co-founder and CEO Elon Musk in a prepared statement. "Incorporating Panasonic's next-generation cells into Model S batteries will ensure unrivaled range and performance."

Click here to read the press release from Tesla.

Written by Lisa Sibley. She can be reached at 408.299.1830 or

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